Major C. H. Douglas in "Manchester Despatch"
(1920s)
· The crisis, the poverty, the mental and physical stress
of these times are in a certain sense artificial.
· Many are starving in the midst of plenty.
· It is not goods and services which are lacking, it is
the money with which to buy them.
· The 'problem' is described as an 'unemployment' crisis.
It's not!
· Organisers, scientists and engineers have been engaged
for hundreds of years, in successfully producing this so-called
'unemployment' crisis.
· The so-called 'problem' is really the transfer of economic
labour from the backs of men on to the backs of machines.
· We have been trying to do it for centuries, and have succeeded!
· The machines are capable of making the goods, but the
unemployed lack the money to buy.
· Our situation should be one of freedom and leisure, but
is disguised as one of 'economic catastrophe'.
· The actual and potential wealth of the world is far beyond
the requirements of the highest standard of living -- for the
whole of the population.
· Why do our politicians and 'inspired' press keep harping
that we cannot afford even our present standard of living, that
our taxes must be increased?
· Why do they keep harping we must work harder and our social
services must be curtailed? Why do they keep insisting our wages
must be lowered? Sound familiar?
· Which, in effect, means: more taxes and lower wages.
· Which equals: less money to spend and we draw less upon
the real wealth of the country.
The two claims cannot both be right:
· First, that the world is rich and getting richer (which
is the claim of the engineer and the scientist).
· Second: On the other hand, that it is poor and getting
poorer (which is the claim of the financier and his protagonist,
the orthodox politician).
· (Both claims cannot at one and the same time be true.)
· The man in the street is finally arriving at the conclusion;
the scientist is right, and the financier is wrong!
Steps toward understanding:
How is it that the financial system presents a fictitious picture
of poverty when, in fact, there is no fundamental poverty anywhere?
Do you realise that when you make goods or grow food - you do not
make the money with which to buy the goods that you have made,
or the food that you have grown?
The greatest factor in the creation of real wealth is the cultural
inheritance of civilisation --scientific knowledge, tools, processes,
organisation, and so forth.
Then comes raw materials, and especially solar energy, and of diminishing
importance, is that of labour.
This cultural inheritance is beyond dispute the birthright of the
whole community and not of any section of it.
The money which is required to distribute this real wealth comes
from an entirely different quarter.
It is actually made by the banks, and the ownership of it is claimed
by the banks.
The process is mainly a book-keeping process and has been epitomised
by an historically well-known banker -- the Rt. Hon. Reginald
McKenna -- in the words:
"Every bank loan and the purchase of every security creates
a deposit, and the repayment of every bank loan and the sale of
a security destroys a deposit."
Suppose you grew a ton of potatoes, and I wrote you out a cheque
for £5 (remember this was written in the 1920s) and took
your potatoes. If you were willing to accept my cheque indefinitely,
it is obvious that as fast as you grew potatoes I could come into
possession of them by writing out cheques for them.
If your only method of getting the goods and services which you
require was by obtaining cheques from me for the purpose of handing
them on to someone else, so long as I retained the monopoly of
writing cheques, I should be potentially the owner of everything
you and your neighbours could produce.
Although banks have the monopoly of the creation of money, no bank
has ever been known to give money away.
It lends money: that is its business, and it expects repayment,
with interest.
In consequence, there is a certain volume of money flowing out
from the banks in the form of loans, and a certain volume of money
always returning to the banks in the form of repayment of loans.
It is this volume of money, and not the amount of available goods,
which governs the purchasing power of the general population.
In order, for goods to be disposed of in the face of an inadequate
supply of purchasing power, prices are driven down, with the result
that producers make a loss and their producing plants are put
out of action.
While the technical details of this situation are too complex for
treatment in a short article, it is accurate to say that ultimately
the core of the problem can be put into four words --
"the monopoly of credit," and that the solution of the
problem is also contained in four words -- "the distribution
of credit."
Put simply, this means:
· The cultural inheritance is the birthright of the community,
and forms the main basis of our immense productive capacity.
· The financial purchasing power necessary to transfer this
production to the members of the community essentially belongs
to them and not to the banking system.
· We are all of us entitled not merely by right, but by
expediency, (i.e., suited to the end in view) to a large and increasing
dividend based not upon work, but upon our inheritance.
· Without that dividend, it is impossible for the economic
system to function since it is obviously useless to produce goods
if they cannot be used, and the orderly production and distribution
of goods depends upon orders backed by money.
· If our present civilisation survives the growing stresses
and strains which are being placed upon it by an ineffective monetary
system, future generations will owe a great debt to such individuals
as Mr. Montagu Norman, (a former) Governor of the Bank of England.
· The banking mentality is conspicuously unsuitable for
the position of immense power in which circumstances have combined
to place it.
· Neither a change of system nor a change of personnel by
itself is sufficient, the issue lies in the outcome of a conflict
between financiers and the general population.
· We must distinguish facts from figures!
· If our civilisation can provide both this change of system
and the personnel to operate it…!
THE WHOLE WORLD IN (DEBT) GOLD CHAINS
By Major C.H. Douglas in "Manchester Despatch"1920s
Out of the welter of discussion and recrimination which has been
proceeding on the subject of the economic and social crisis through
which the world in general, and this country in particular, is
passing, one idea stands out clearly. It is a new idea, and yet
it has been, I think, grasped by a majority of the population.
It is that the crisis, the poverty, and the mental and physical
distress which are the features of these present times, are in
a certain sense artificial. We are starving in the midst of plenty.
It is not goods and services which are lacking-it is the money
with which to buy those goods and services which either actually
exist or could potentially be made. Money is only a ticket system.
It would appear that every effort has been made to confuse and
obscure this issue. The crisis is described as an unemployment
crisis, whereas a little consideration will make it clear that
our scientists, our organisers, and our engineers have been engaged
for hundreds of years, and successfully engaged in producing this
so-called ''unemployment" crisis, which properly considered
is, of course, the successful transfer of economic labour from
the backs of men on to the backs of machines.
That is what we have been trying to do, and that is what we have
succeeded in doing. The machines are capable of making the goods,
but the unemployed cannot buy them because they lack money, and
to them a situation which should be one of freedom and leisure,
appears disguised as one of economic catastrophe.
The actual and potential wealth of the world is demonstrably beyond
all the requirements of the highest standard of living for the
whole of the population.
What are we told by our politicians and our inspired Press and
Broadcasting agencies?
That we cannot afford even our present standard of living, that
our taxes must he increased, which, if it means anything at all,
means that we have less money to spend on our personal requirements
and can therefore draw less upon the real wealth of the country.
That we must work harder and our social services must be curtailed.
That the wages of labour must be cut down, and the dividends of
railway shareholders, amongst others, must be so reduced that
they, in turn, will be powerless to obtain even that portion of
this abundant and increasing wealth to which they have been accustomed.
Obviously these two claims, first, on the one hand, that the world
is rich and getting richer (which is the claim of the engineer
and the scientist), and on the other band, that it is poor and
getting poorer (which is the claim of the financier and his protagonist,
the orthodox politician) cannot at one and the same time be true.
In spite of every hindrance to the formation of an instructed opinion,
the man in the street has arrived at the correct conclusion. The
scientist is right, and the financier is wrong.
Now, the first step towards understanding how it is that the financial
system presents a fictitious picture of poverty when, in fact,
there is no fundamental poverty anywhere, can, I think, best be
taken by realising that when you make goods or grow food, you
do not thereby make the money with which to buy the goods that
you have made or the food that you have grown.
The greatest factor in the creation of real wealth is the cultural
inheritance of civilisation -- scientific knowledge, tools, processes,
organisation, and so forth. A second factor is that of raw materials,
and especially solar energy, and a third factor, of diminishing
importance, is that of labour. This cultural inheritance is beyond
dispute the birthright of the community and not of any section
of it.
But the money which is required to distribute this real wealth
comes from an entirely different quarter. There is now no dispute
possible in regard to the matter. It is actually made by the banks,
and the ownership of it is claimed by the banks.
The process is mainly a book-keeping process and has been epitomised
by a well-known banker -- the Rt. Hon. Reginald McKenna -- in
the words: "Every bank loan and the purchase of every security
creates a deposit, and the repayment of every bank loan and the
sale of a security destroys a deposit."
Suppose you grew a ton of potatoes, and I wrote you out a cheque
for £5 and took your potatoes. If you were willing to accept
my cheque indefinitely, it is obvious that as fast as you grew
potatoes I could come into possession of them by writing out cheques
for them.
It is also obvious that If your only method of getting the goods
and services which you require was by obtaining cheques from me
for the purpose of handing them on to someone else, that so long
as I retained the monopoly of writing cheques I should be potentially
the owner of everything you and your neighbours could produce.
Although banks have the monopoly of the creation of money, no bank
has ever been known to give money away. It lends money: that is
its business, and it expects repayment, with interest. In consequence,
there is a certain volume of money flowing out from the banks
in the form of loans, and a certain volume of money always returning
to the banks in the form of repayment of loans.
It is this volume of money, and not the amount of available goods,
which governs the purchasing
power of the general population. In order, quite ineffectively,
to enable goods to be disposed of in the face of an inadequate
supply of purchasing power, prices are driven down, with the result
that producers make a loss and their producing plants are put
out of action.
While the technical details of this situation are too complex for
treatment in a short article, it is accurate to say that ultimately
the core of the problem can be put into four words - "the
monopoly of credit," and that the solution of the problem
is also contained in four words - "the distribution of credit."
Put into language which anyone can understand, this means that
just as the cultural inheritance, to which I previously referred,
is the birthright of the community and forms the main basis of
our immense productive capacity, so the financial purchasing power
necessary to transfer this production to the members of the community
essentially belongs to them and not to the banking system.
We are all of us entitled not merely by right, but by expediency,
to a large and increasing dividend based not upon work, but upon
our inheritance, and without that dividend it is impossible for
the economic system to function since it is obviously useless
to produce goods if they cannot be used, and the orderly production
and distribution of goods depends upon orders backed by money.
If our present civilisation survives the growing stresses and strains
which are being placed upon it by an ineffective monetary system,
future generations will owe a great debt to such individuals as
Mr. Montagu Norman, the present Governor of the Bank of England.
For he has succeeded in demonstrating, even to the more public
spirited amongst our bankers, that the banking mentality is conspicuously
unsuitable for the position of immense power in which circumstances
have combined to place it.
Neither a change of system nor a change of personnel by itself
is sufficient, and in the last resort the issue lies in the outcome
of a conflict between reactionary financiers and the general population.
Not only do we require a radical modification in the credit and
financial system, but this modification requires for its operation
a type of mentality which is capable of distinguishing facts from
figures.
If our civilisation can provide both this change of system and
the personnel to operate it, we can pass within a short period
of time into, at any rate, an economic millennium.
As you read the following, remember C.H. Douglas was writing the
above words nearly eighty years ago. He saw then the problem was
not production… the problem was the distribution of production.
The answer is a philosophical answer!!!
World rulers en route to a different civilisation-- the 20:80 society.
"World-class dreams are at home in San Francisco's Fairmont
Hotel," wrote the authors of "The Global Trap"
in 1997. "In this site steeped in history, the man welcoming
the world's elite in late September 1995 is one of the few who
has made himself history. Mikhail Gorbachev…"
The world's elite came to discuss and plan for the future - our
future, only we have not been invited to have a say.
The following took place at the meeting:
"…The ageing self-made billionaire doesn't bat an eyelid.
He is completely focused as he asks the central question in response:
'How many employees do you really need, John?' (asks David Packard,
co-founder of the hi-tech giant Hewlett-Packard. )
'Six, maybe eight,' Gage dryly comes back. (John Gage, top manager
at Sun Microsystems) 'We'd be really stuck without them. It's
all the same no matter where on earth they live.'
The leader of the discussion, Professor Rustum Roy from Pennsylvania
State University, tries to dig deeper: And how many people are
currently working for Sun Systems?
Gage: 'Sixteen thousand. All but a small minority are rationalization
reserves.'
Not a murmur passes through the room. The prospect of previously
undreamt-of armies of the unemployed seems to go without saying
for those present. None of the highly paid career managers from
the company divisions of the future believes that there will be
enough regularly paid jobs in any sector of the economy in the
technologically demanding growth-markets of hitherto affluent
countries.
The Fairmont pragmatists sum up the future in a pair of numbers
and a concept: '20 to 8o' and 'tittytainment'.
In the next century, 20 per cent of the population will suffice
to keep the world economy going.
'More manpower won't be needed.' thinks Washington SyCip.
A fifth of all job-seekers will be enough to produce all the commodities
and to furnish the high-value services that world society will
be able to afford. This 20 per cent, in whichever country, will
actively participate in life, earnings and consumption to which
may be added another 1 per cent or so of people who, for example,
have inherited a lot of money.
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