the Whole World in (Debt) Chains

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.