(Or Australia Limited, or America Limited, etc)
Major C. H. Douglas, in London "Daily Herald" 1920s)
· The world's claims upon food, clothes, housing and the
amenities of civilisation must rest upon a new basis.
· The provision of universal economic employment has now
become quite automatically an impossibility.
· The idea that the rich class in the past has been an idle
class is one of those myths.
· To a man digging potatoes in the field an artist painting
a picture destined to become a national heirloom is an idle trifler.
It is quite possible that the artist could dig potatoes, but the
man digging potatoes would be unable to paint a picture.
· The problem is not a problem of 'employment'. It is one
of distribution, and orderly distribution is almost invariably
accompanied by something which can be called a ticket system.
· A bank ticket (cheque) entitles you to a certain amount
of any goods and services. A railway company's ticket entitles
you to a certain amount and quality of transportation.
· The question of how to distribute is wrapped up with the
question of the right to issue and to own the tickets.
· It is important to understand exactly what is the correct
definition of inflation.
· True Inflation is not an increase of money, but an increase
of money accompanied by a rise of prices -- thus robbing everyone
of a portion of his wages.
· It is essential that a greater amount of purchasing power
should not be accompanied by an increase of prices, but should
be accompanied by a fall of prices.
· At the same time, it is necessary that the producer of
the goods does not make a loss as a result of a fall in prices.
· Purchasing power must be put into the hands of large numbers
of people who are not in employment.
· We require to do this without taking it from the people
who are in employment.
· The necessary mechanism for this purpose is the dividend
system.
· It is quite possible to conceive of Great Britain (or
any other industrialised nation) in the light of what financial
experts call a ''holding company" .
· This 'holding company' issues additional purchasing power
on the credit of all of them and distributes this purchasing power
as dividends to its shareholders.
· Let's call this holding company Great Britain, Ltd., and
let's take back from the Bank of England, which is a private company
controlled by financiers, the power of actually creating money.
· Great Britain surrendered its sovereign power of creating
its own money in 1694 with the setting up of the Bank of England.
· (Historically, Australia's fledgling power of creating
its own money was surrendered when the Commonwealth Bank was first
strangled in the 1920s and eventually sold off by the Keating
Government.)
· Without interfering with the management of industry, it
is possible for Britain Limited, (or Australia Limited, or America
Limited) to issue purchasing power in the form of a national dividend,
not by taxing its shareholders, but by creating the money in exactly
the same way that the banks create it at the present time.
· The amount of purchasing power issued as a dividend will
ensure that all goods which are produced can be bought by the
true shareholders, i.e., the people, the citizens of the country,
be it Great Britain or Australia or America.
· To be effective it is absolutely vital that it should
include a method of controlling prices. This necessity of control
of prices is so that the additional money does not cause prices
to rise, while at the same time ensuring to the producer that
he is remunerated.
· There are methods by which this can be done, which have
been proved to be successful.
· These methods and other arrangements which would be desirable
in the organisation of the country are from their nature technical,
and they are, of course, only indicated in the preceding paragraphs.
· The destruction of the monopoly of credit, and its distribution
somewhat along the lines described above would result in:
· The whole of the population would be free from poverty
and the fear of poverty.
· Freedom would be granted on terms which would remove forever
the stigma at present attached to unemployment.
· It would also remove the resentment of the "worker"
at being taxed to keep the "unemployed."
· Every individual, no matter what his occupation or want
of occupation, would receive his birthright. He would, by being
a shareholder in the heritage of this civilisation, and the wealth
which flows from this heritage, have his share.
· The competition for employment in the economic system
would become even keener than it is at the present time among
those who are fit for employment. Both the prestige and, at any
rate for a time, the remuneration of the worker might easily be
higher than that of those who, by temperament or inclination,
were found to be unsuited to operate the delicate machine of the
modern productive system.
· It is not proposed to 'nationalise' industry. These matters
are matters of administration, not of fundamental policy.
· The size of the unit which is found most convenient will
largely determine the question of so-called private or public
administration. Our civilisation owes very little of the progress
it has made to State institutions.
· Clearly recognise:
· Our present administration of industry, up to now, has
been amply sufficient to provide us with enough, and more than
enough.
· To interfere with this existing industrial organisation,
which by common consent has resulted in a glut, before making
arrangements for the unproved distribution so urgently necessary
to distribute that glut, is completely to fail in an understanding
of the nature of the problem.
· It is one matter to understand what is required to end
the present tragic situation, but another matter to deal with
it.
· And quite another matter to have the power to put those
plans into operation.
· We imagine it is only necessary to have a majority of
opinion in favour of a certain line of action. Not so!
· Our freedom of choice of our Parliamentary representatives
are too narrow. We have less freedom as to the issues on which
we elect them.
· We must ensure that the Member shall apply his attention
to dealing with those problems which we consider vital.
· Every Member of Parliament, no matter to which party he
belongs, is the representative of every voter in his constituency.
· Every voter must apply pressure to his Member of Parliament.
Do it now!
GREAT BRITAIN LIMITED
(Or Australia Limited, or America Limited, etc)
Major C. H. Douglas, in London "Daily Herald"
1920s
Unless wrecked by catastrophe, the world is on the threshold of
an era in which the claims upon food, clothes, housing and the
amenities of civilisation must of necessity rest upon a new basis.
Work, or employment, as we phrase it, is not to be in future the
main claim upon these things, since the provision of universal
economic employment will become quite automatically an impossibility.
This is not to say that the world will become idle, because I do
not believe that it will. The idea that the rich class in the
past has been an idle class is one of those myths which, resting
in the main on a too narrow conception of work, a little observation
would have been sufficient to disprove.
To a man digging potatoes in the field an artist painting a picture
destined to become a national heirloom is an idle trifler, but
it is quite possible that the artist could dig potatoes, although
the man digging potatoes would be quite unable to paint a picture.
The problem, then, is not a problem of employment, and any solution
which depends on the reemployment of a considerable proportion
of the unemployed population in economic production must in its
nature be both unscientific and unsound. It is one of distribution
and the question of employment is one which in the future, to
a large extent, each individual will have to solve for himself,
just as the rich man solves it.
Now, orderly distribution is almost invariably accompanied by something
which can be called a ticket system. When you exchange a thin
bit of paper issued by the Bank of England for a thicker bit of
paper issued by the London, Midland and Scottish Railway Company
you are only exchanging one kind of ticket for another.
The Bank of England ticket entitles you to a certain amount of
any goods and services; the railway company's ticket entitles
you to a certain amount and quality of transportation. So that
distribution is wrapped up with this question of the right to
issue and to own tickets.
When any suggestion is made to increase the quantity of money tickets,
it is met by a cry of "inflation,'' and it is suggested that
inflation and ruin are one and the same thing.
For this reason, it is very important to understand exactly what
is the correct definition of inflation, which is not an increase
of money, but an increase of money accompanied by a rise of prices
thus robbing everyone of a portion of his wages.
Curiously enough, numbers of professional economists and bankers
who stigmatised my own proposa1s as disguised inflation, whatever
they mean by that, are now asking for undisguised inflation, with
the object of raising prices.
So far as I can see, the only requirement on which insistence is
made from orthodox sources at the present time in regard to inflation
is that it shall be accompanied by the creation of a still further
debt to the banks.
However that may be, it is essential that the issue of a considerably
greater amount of purchasing power should not be accompanied by
an increase of prices, and should, if possible, be accompanied
by a fall of prices.
This is quite possible, but it is necessary at the same time to
see that the producer of goods does not make a loss as a result
of a fall in prices, and thus become discouraged from producing.
That is half of the problem, but the other half is concerned with
the fact that production will increasingly be a matter of machine
production, and we require to put purchasing power or tickets,
or whatever you like to call this thing that we now refer to as
"money,'' into the hands of large numbers of people who are
not in employment, and we require to do this without taking it
from the people who are in employment. We are quite familiar with
the necessary mechanism for this purpose-it is the dividend system.
It is quite possible to conceive of Great Britain in the light
of what financial experts call a 'holding company,' that is to
say, an undertaking which, without interfering with the numerous
smaller undertakings that it controls, yet issues additional purchasing
power on the credit of all of them and distributes this as dividends
to its shareholders.
Let us call this holding company Great Britain, Ltd., and let us
suppose that Great Britain, Ltd., takes back from the Bank of
England, which is a private company controlled by financiers,
probably not English, the power of actually creating money, which
it has surrendered.
Then, without interfering with the management of industry in the
country, it is possible for Great Britain Ltd., to issue purchasing
power in the form of a national dividend, not by taxing its shareholders,
but by creating the money in exactly the same way that the banks
create it at the present time, and to such an amount so will ensure
that all goods which are produced can be bought.
To make such a scheme effective it is absolutely vital that it
should include a method of controlling prices, so that the additional
money does not cause prices to rise, while at the same time ensuring
to the producer that, as such, he is remunerated. There are methods
by which this can be done, which have been proved to be successful.
These methods and other arrangements which would be desirable
in the organisation of the country on the lines I have indicated
are from their nature technical, and they are, of course, only
indicated in the preceding paragraphs.
In general, the result which might be anticipated from the destruction
of the monopoly of credit, and its distribution somewhat along
the lines I have described, would be that the whole of the population
would not only be free for ever from poverty and the fear of poverty,
but that this freedom would be granted on terms which would remove
for ever the stigma at present attached to unemployment when,
at the same time, it is accompanied by financial distress, and
the resentment of the "worker" at being taxed to keep
the "idle."
Every individual, no matter what his occupation or want of occupation,
would realise what I believe to be the fundamental fact that he
is by birthright a shareholder in the heritage of civilisation,
and that the wealth which flows from this heritage is part of
the birthright. The competition for employment in the economic
system would, I believe, become even keener than it is at the
present time among those who are fit for employment in it, since
both the prestige and, at any rate for a time, the remuneration
of the worker might easily be higher than that of those who, by
temperament or inclination, were found to be unsuited to operate
the delicate machine of the modern productive system.
It will be realised that, so far as industry itself is concerned,
the remedies which are suggested do not touch questions such as
are commonly referred to under the name of the nationalisation
of industry.
These matters are matters of administration, not of fundamental
policy. There is room for legitimate difference of opinion as
to the ultimate decision in regard to such matters, and my own
opinion is that the size of the unit which is found most convenient
will largely determine the question of so-called private or public
administration, and that we owe very little of the progress we
have made to State institutions.
The point to recognise clearly is that whether or no our present
administration of industry is the best possible, it has been amply
sufficient to provide us with enough, and more than enough, actual
production to make us all wealthy, and that to interfere with
this existing organisation, which by common consent has resulted
in a glut, before making arrangements for the unproved distribution
so urgently necessary to distribute that glut, is completely to
fail in an under-standing of the nature of the problem.
Finally, it should be recognised that it is an entirely different
matter to understand what is required to end the present tragic
situation, on the one hand, and to have the power to put those
plans into operation, on the other hand.
We are far too prone to imagine in Great Britain it is only necessary
to have a majority of opinion in favour of a certain line of action,
and that when this is achieved we have ready to our hand a Parliamentary
machine waiting to translate this opinion into effective operation.
It is more than doubtful if this is the case. We have far less
freedom in the choice of our Parliamentary representatives than
we think we have; still less freedom as to the issues on which
we elect them; and least of all have we the ability to ensure
that when they get to Westminster their attention shall be devoted
to dealing with those problems which we consider vital. Nevertheless,
in theory, at least, Parliament is supreme in this country, and
every Member of Parliament, no matter to which party he belongs,
is the representative of every voter in his constituency.
It is quite probable that the most practical step which can be
taken at the moment is for every voter, no matter what his political
complexion may be, and wasting time in trying to chance his Parliamentary
representation, to make it his personal business to apply pressure
with a view to making plain to his Member that every day's delay
in dealing with the money problem is an additional argument for
the abolition of the Parliamentary system.
Do it now!
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