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TRY IT ON THE DOG!
SOCIAL CREDIT AND THE SURVIVAL
OF WESTERN CHRISTIAN CIVILISATION

by James Reed

"When a poacher gets a young Whippet he always takes it out when there is a lot of easily-caught game, which he lets it catch. This gives it confidence. That indicates a way to give people a sense of their power. First encourage people to try small things. Don't necessarily tackle the financial system straight away - tackle the local district council because there is a hole in the road and make them put it right. When you have got a number of people to see they can get a hole in the road put right, they can set out to get a new road, and so on. The principle is to try it on the dog!"
Major C.H. Douglas, The Approach to Reality 1936.

The Breakdown of Civilisation
In a profound paper published in The New Times of May 1987, Eric D. Butler stated that the basic problem before us is "how to minimise the damage of the inevitable break up of civilisation". C.H. Douglas also observed in this context:
"There is at the moment, no party, group or individual at once possessing the power, the knowledge, and the will, which would transmute the growing social unrest and resentment… into a constructive effort for the regeneration of Society. This being the case, we are merely witnesses to a succession of rear-guard actions of the so-called Conservative elements in Society… a process which can only result, like all rear-guard actions, in a successive, if not successful, retreat on the part of the forces attacked."
The threats to civilisation need not be detailed here as we all know them well enough and growing evidence of a breakdown in civilised order is before our eyes every day.
Reflecting on this perilous state of affairs Butler concluded:
"So long as the life-force is sustained in the seed which drops into the decaying vegetation on the forest floor, it can result in new growth. The very disintegration taking place today is producing the conditions in which new growth can, over a period, take place. The task of those who have grasped the Social Credit idea, is to ensure that it is protected. In one sense, those who have grasped the Social Credit idea are entrusted with a type of sacred trust. They are the true conservationists of this globally destructive period in man's history, showing how as internationalism results in still greater convulsions and destruction, there is a genuine alternative, that a policy of Death can be overcome with a policy of Life and more abundance."
What is social credit and how can social credit address the challenges of our time? Is social credit irrelevant, a mere museum piece in our "globalised", "multiculturalised" world?
What is Social Credit?
Social credit has been identified, by the under-informed, as merely a set of economic policies, primarily focused at reform of the financial system. Major Douglas did state in response to a question asked during his address given at the New School for Social Research, New York 23rd April, 1934 that "Social credit merely is the power to monetize real wealth, and the power to monetize it is the power of credit, and if that power is owned socially then this is social credit."
That definition though was made in a specific context in response to a question. On many other occasions Douglas made it clear that social credit is more than a scheme for monetary reform.
In The Approach to Reality , 1936 Douglas said:
"As I conceive it, Social Credit covers and comprehends a great deal more than the money problem. Important as it is, primarily because it is a question of priority, Social Credit involves a conception, I feel a true conception… of the relationship between individuals and their association in countries and nations, and their association in groups."
Further to this in an address given to the Social Credit Conference, London 26th June 1937, The Policy of a Philosophy Douglas said:
"In my opinion, it is a very superficial definition of Social Credit that it is merely a scheme of monetary reform… Social Credit is the policy of a philosophy. It is something based on what you profoundly believe… to be a portion of reality.
It is probably a very small portion, but we have glimpsed a portion of reality, and that conception of reality is a philosophy, and the action we take based upon that conception is a policy, and that policy is Social Credit."
What does it mean to say that social credit is the policy of a philosophy? A philosophy is a world-view - a systematic attempt to understand the nature of things at the most fundamental level. Does God exist? Do we have freewill or are all human acts determined by forces outside of their control? These are classical philosophical questions and there are of course many others. A policy is a set of actions based on a philosophy designed to obtain particular results. The implementation of a policy is called administration. Thus to say that social credit is the policy of a philosophy is to say that all social actions made by man towards a certain policy arise because of a philosophy.
There are two fundamental philosophies of human social life which give rise to two very different policies.
· Collectivism takes various forms but in general holds that power and authority arises from a point external to the individual.
· Individualism sees the source of power and authority as arising within individuals.
Collectivism naturally gives rise to policies of totalitarianism which sees the individual as subordinate to the Collective (be it State, group and/or so on) so that the freedom of the individual can be sacrificed for notions of "the greater good", "the utility of the greatest number" and other such abstractions.
Individualists are opposed to such subordination and see the most fundamental good as being the flourishing and self development of the individual persons who comprise the Group, the State, and so on.
Collectivism favours policies of the centralisation, concentration and monopolisation of power.
Douglas stated the individualist position very clearly in his book Economic Democracy when he said:
"Systems were made for men and not men for systems, and the interest of man, which is self-development, is above all systems, whether theological, political or economic… Accepting this statement as a basis of constructive effort, it seems clear that all forms, whether of government, industry or society exist contingently to the furtherance of the principles contained in it. If a state system can be shown to be inimical to them - it must go; if social customs hamper their continuous expansion - they must be modified; if unbridled industrialism checks their growth, then industrialism must be reigned in. That is to say, we must build up from the individual, not down from the State."

In February 1951, Douglas himself represented these all-important relationships in diagrammatic form:

PHILOSOPHY
|

POLICY

/\

/

Economics

 

\
/

Administration

 

\
Consumer control of production Integral Accounting
Hierachy
Contracting out mechanisms

 

OBJECTIVE: Social stability by the integration of means and ends.

INCOMPATIBLES: Collectivism, Dialectical Materialism, Totalitarianism, Judaeo Masonic Philosophy and Policy. Ballot-box democracy embodies all these.

BALANCE IN SOCIAL CREDIT
Geoffrey Dobbs in "Balance in Social Credit", "The Social Crediter" 11th April, 1953 represented Douglas' thought in three simple diagrams:

PHILOSOPHY
|

POLICY

/\

/

Economics

 

\
/

Administration

 

\
Consumer control of production Integral Accounting
Hierachy
Contracting out mechanisms

 

New Testament Philosophy
|
Old Testament Philosophy
|
Social Credit policy
Monopolistic Policy
/
\
/
  \
New Economics New Politics
Old Economics
  Old Politics

SOCIAL CREDIT AND CHRISTIAN PHILOSOPHY

Dobbs goes on to state in his article "What is Social Credit?" that social credit is, in two words "Practical Christianity", but that of course begs the question about what Christianity actually is. Douglas said of Christianity that it "is either something inherent in the very warp and woof of the Universe, or it is just a set of interesting opinions." There are Social Crediters who believe that Christianity does correctly describe the "ultimate reality of the Kingdom of God" and not merely fleeting social conventions as the politically correct mainstream churches embrace of homosexualism, feminism, internationalism and other collective nonsense ideologies.
"Religion" is a word which comes from the Latin re meaning 'back' and ligare meaning 'to bind'. Thus social credit philosophy is a mechanism for binding back to reality. Dobbs points out that "social credit" is present in all societies because it is the credit (or trust or faith) which acts as the glue holding societies together.
Social credit is maximised in societies where the Christian religion is practised and minimised in atheistic materialistic communist societies. This is what Dobbs meant by calling social credit applied Christianity.
Douglas in many publications, including The Approach to Reality 1936, The Brief for the Prosecution 1954, The Big Idea 1942, and Eric Butler more recently in The Moral Implications of Centralised Power published by The Australian Heritage Society 2003, have pointed out that the Christian philosophy of Love, is quite incompatible with the philosophy of Collectivism. Collectivism treats individuals as a means to an end (and a fast "end" at that); Christianity and Social Credit treat individuals as ends in themselves, as of value in their own right.

ACCUSATION: "NOT A CHRISTIAN PHILOSOPHY"

The accusation has been made that social credit is not a Christian philosophy because it has primarily communistic roots. In his article "Is Social Credit Christian?" (FACS Report, Vol.5, No.5, May 1986) Ian Hodge makes a number of such claims to discredit social credit.
First he claims that social credit is inferior to the neo-classical economic theory of Boehm-Bawerk and Ludwig von Mises, now the standard economic theory indoctrinated to students at our universities.
Second he takes Major Douglas to task for saying that the ideals of the Old Testament are in conflict with those of Christianity. Hodges' position is that God is the author of both books so necessarily they must be consistent.
Finally after mentioning the League of Rights' opposition to socialism ("or at least the socialism originating in the USSR") Hodges goes on to claim that Social Credit is a form of socialism.
The Nature of Socialism and Capitalism
Leaving Hodges for a moment, let us consider the nature of socialism and capitalism.
Socialism in all its forms involves the removal of private property from the individual and its concentration into the hands of the collective, typically the State. It is a form of Monopoly.
Global Capitalism does almost the same: It is an economic system where the ownership and benefits of capital are also appropriated by a small number of people (Global Capitalists) to the exclusion of the many whose labour made the capital productive. It is essentially a system of the autonomous rule by Money. As a form of Monopoly, it too is contrary to genuine democratic principles.
Hodges takes Douglas to task for his scheme of the National Dividend, which Hodges believes is just a dole by which "the productive in society will subsidise the lazy and inefficient."
The claim that Social Credit is inferior to orthodox economics will be dealt with later in this essay as will the claim that the National Dividend is "socialistic". For the moment it is sufficient to say that the idea of distributing a fundamental "living wage" to all people so that the majority can participate in having 'private property" rather than being wage slaves is not socialistic at all. Socialism and capitalism are intrinsically monopolistic systems; the very aim of Social Credit is to break down such systems of centralised power.
Hodges, like many other critics has seized on a few quotations from Douglas, quoted out of context and jumped over logic to his conclusion.
Major Douglas did not deny the Old Testament's truth in the sense that atheistic philosophers might do. In speaking of "conflict" he was saying that the philosophy of Love of the New Testament conflicts with the extreme Zionism of the Old where the tribal God of the Jews leads the "Chosen People" in rampages of genocide of innumerable peoples.

In the Realistic Position of the Church of England C.H. Douglas said:
"Speaking for myself, I should reject the so-called Old Testament as containing little which for the purposes of contemporary religion, is not purely negative - a warning. Its connection with 'the Chosen People" myth has distorted any usefulness it might have, and if it is to be retained, it requires treatment in a highly critical spirit, completely divorced from reverence. It is only necessary to observe the extent to which the world tragedy is complicated by Zionism to recognise its vicious effects. The Jewish question is a mass of untruths, half-truths, and fake materialism, and one of the essentials of any solution is to strip it of occultism which is its chief ally."
Janine Stingel in Social Credit: Anti-Semitism, Social Credit and the Jewish Response, (McGill-Queens University Press, Montreal 2000) says that Social Credit is "wholly dependent on an anti-Semitic conspiracy theory". This claim is only true under a high re-definition of anti-Semitism where any criticism of Jewry is by definition anti-Semitic, which of course is what the term now means in the present politically correct climate. But closing off important aspects of reality from analysis and criticism merely constitutes another form of totalitarianism - a totalitarianism of thought, and like all such totalitarianism, it will ultimately unwind.
With these groundless criticisms still in mind it is worthwhile to consider the words of some of the Popes on the same issues which Douglas addressed.
Pope Pius XI affirmed the same principle accepted by Douglas of the decentralisation of power:
"It is an injustice, a grave evil and a disturbance of right order for a larger and higher organisation to arrogate to itself functions which can be performed efficiently by smaller and lower bodies."
Pope Pius XI said in a radio address of 1st June 1941:
"Material goods have been created by God to meet the needs of all men, and must be at the disposal of all of them, as justice and charity require. Every man indeed as a reason-gifted being, has from nature, the fundamental right to make use of the material goods of the earth, though it is reserved to human will and the juridical forms of the peoples to regulate, with more detail, the practical realisation of that right."
Pope John Paul II in Encyclical Solicitudo Rei Socialis 30th December 1987 recognised the perils to freedom posed by the money power:
"Among the actions and attitudes opposed to the will of God, the good of neighbour and the "structures" created by them, two are very typical: on the one hand, the all-consuming desire for profit, and on the other, the thirst for power, with the intention of imposing one's will upon others."
This is problematic for the same reason that Douglas thought it was, as Pope John XXIII said on 15th May 1961:
"The Church's teaching on social matters has truth as its guide, justice as its end, and love as its driving force… The cardinal point of this teaching is that individual men are necessarily the foundation, cause and end of all social institutions."

SOCIAL CREDIT AND ECONOMICS

The claim was made earlier by a critic of social credit that neo-classical economics is superior to social credit and is more "Christian". Let us look briefly at the basic textbook model of "rational economic man" and see how truly unchristian and materialistic rational economic man is.
Mainstream Economics a 'Religion"
The textbooks generalise so that their model is an abstraction from reality - and this is so as rational economic man lacks all of the essential moral and spiritual ingredients that make one human. Rational economic man is a utility maximiser: "It" acts so as to produce the maximum happiness and pleasure for "itself". Rational economic man is thus purely selfish: the philosophy of hedonistic utilitarianism.
Although the technical details cannot be sketched here, from this flawed philosophical conception of human nature a model of microeconomics can be devised - with, for example forward-sloping and backward-sloping supply and demand curves, respectively. Macro-economic aspects - that is the "big-scale" phenomena of the capitalist economy such as the theory of the firm are also based on this same utilitarian framework. Thus a firm's primary reason for existence is (short-term) profit - maximisation.
The problem with this theory of capitalism is that it is based on axioms and principles which are known to be wrong: established by a group of Cambridge economists under the critical leadership of Professor Joan Robinson. There are a large number of technical books detailing these flaws (e.g., M. Hollis and E. Nell, Rational Economic Man 1975), but the standard economic degree ignores these criticisms. The reason is, that mainstream economics is not a science but an ideology or a religion, the religion of capitalism. Thus the "criticisms" and "paradoxes" are matters for professionals to ponder after hours, not in the course of doing "real" economics.
Social Credit Founded on Rich Christian Culture
This situation contrasts sharply with the philosophical basis of Social Credit. Social Credit is founded on the rich theological and philosophical foundation of Western Christian culture. The individual in social credit is not the soulless atom of neo-classical economics, but a person with a soul, morality and culture.
Neo-classical economics by stripping the person of all their essential spiritual qualities readily allows collectivist entities such as corporations to dominate individuals. This conventional economics sees corporations as more real than individuals since corporations are the ultimate causal agents of capitalism.
Neoclassical economics, as a form of reductionism (a theory that all complex systems can be completely understood in terms of their components) has also been unified with the ultimate materialist reductionist theory - socio-biology - which sees individuals as nothing more than masses of chemicals at the mercy of "selfish genes" which aim at self-replication.
Social Credit does not see economic reality as dominated by "economic laws" as orthodox economics does. Rather economics is, to use contemporary jargon "a social construction", a series of social conventions. This applies especially to the financial system. If money is a reality for the orthodox economist, as fundamental as the electron is for the physicist, for the social crediter, money remains only a convention, a representation of the 'effective demand".
In The Use of Money 1934, Douglas said:
"The financial system is nothing but a ticket system". Money differs from railway tickets in being universally accepted in exchange transactions.
Douglas belongs to a long tradition of thinkers and actionists who opposed the monopoly of the money power and proposed that nations should control their own credit issue (the national credit).
Thus Abraham Lincoln said:
"The money power preys on the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes."
Lincoln also said:
"Money is the creature of law, and the creation of the original issue of money should be maintained as an exclusive monopoly of the national Government. The monetary needs of increasing numbers of people advancing towards higher standards of living can and should be met by the Government. Government, possessing power to create and issue currency and credit as money, and enjoying the right to withdraw both currency and credit from circulation by taxation and otherwise, need not and should not borrow capital at interest as the means of financing Government work and public enterprise. The privilege of creating and issuing money is not only the prerogative of Government, but it is the Government's greatest creative opportunity. Thus money will cease to be master, and become the servant of humanity. Democracy will rise superior to the Money Power."
Creation of credit has been monopolised by the Money Power at least since the existence of the modern nation state, and earlier when goldsmiths learned that they could issue credit notes without having the same reserve of gold in their safes, provided that not everybody called on their reserves at the same time.
The United States, before the American Revolution had bucked this monopolistic trend and had issued their own money - Colonial Scrip - which was issued, in the words of Benjamin Franklin "in the proper proportion to the demands of trade and industry".
The social reformer Robert L. Owen had noted that the Money Power was soon to hear of this:
"It was not very long until this information was brought to the Rothschild's bank, and they saw that here was a nation ready to be exploited; here was a nation that had been setting up an example that they could issue their own money in place of the money coming through the banks.
The Rothschild bank caused a Bill to be introduced in the English Parliament, therefore, which provided that no Colony of England could issue their own money. They had to use English money. Consequently, the Colonies were compelled to discard their "Scrip" and mortgage themselves to the Bank of England in order to get money. For the first time in the history of the United States our money began to be based on debt."
Benjamin Franklin said that it was financial manipulation, rather than the tax on tea that lead to the American Revolution.
Major Douglas was well aware that the money power controlled the fates of nations; indeed as M.A. Rothschild had once boasted: "Let me issue and control a nation's money and I care not who makes its laws." Douglas saw that the system of fractional reserve banking - where the private-based money power elites controlled credit creation, being able to lend out or extend credit whilst only maintaining a fraction of the reserves, was a form of economic and financial parasitism. By this system, money is created as a debt to the banking system. Circulated money is a loan and must be paid to the bank - with compound interest.
This interest was not created by the bank and was not created by the debtor. As it is impossible to pay back that which does not exist, debts accumulate at an exponential rate. The public debt thus is an impossible contract that governments can never repay. It is impossible to escape debt when all the money to pay off the debt is created by creating a debt.

"CONTRADICTION" OF CAPITALISM

Douglas went much further than the "national crediters" in his critique of Capitalism - and Socialism for that matter. Douglas saw the banking fraud, "that the money that they create is their own money" as a "tyrannical fraud" (Dictatorship by Taxation 1937). Nevertheless the core problem of the financial system was the maintenance of a condition of financial scarcity in the midst of an abundance of production produced by technology. Consequently individuals must work harder and longer hours rather than enjoy the leisure and creativity of an advanced civilisation.
Douglas' "A"+ "B" theorem is a proof that there is a fundamental gap between purchasing power and prices. Let Group "A" payments in an economy represent the rate of distribution of purchasing power to individuals in the form of wages, salaries and dividends.
Let Group "B" payments be all payments made to organisations for raw materials, bank charges and other external costs. "A" represents the rate of flow of purchasing power to individuals. All payments go into prices. Therefore, the rate of flow of prices must be greater than or equal to "A" + "B".
For a non-zero "B", "A" will be less than "A" + "B", so "A" will not purchase "A" + "B". Hence a proportion of the product of at least "B" constitutes a form of purchasing power that must be filled in the same period by a purchasing power other than wages, primarily by loan credit (bank overdrafts) or export credit. Put another way, industry as a whole creates prices at a faster rate than it distributes money to pay for them. Additional money must be obtained from some source outside of the industrial system.
Douglas proposed that the gap between prices and purchasing power be the financing of consumption by means of a National Dividend distributed to every citizen as well as an automatic regulation of prices according to the ratio between total production and total consumption. This National Dividend is a way of giving private property back to individuals and thus decentralising power because financial freedom is the foundation of all freedom.
The National Dividend is not a dole or a charity but is given to each person by virtue of their membership in the community. Productive capital is only productive because of the background of the community inheritance of "social capital" which enables capital to exist at all. That which is produced using the common cultural heritage of a community rightly belongs to the community as a whole, and the National Dividend is a reflection of this.
Would Solve a Number of Pressing Socio-Economic Problems
It is not too difficult to see how social credit proposals would solve a number of pressing socio-economic problems. For example in Australia one in four workers are employed as casuals and Australia has the highest casual workforce of any nation. Elisabeth Wynhausen in an article in the Weekend Australian 5-6/3/05, states that "millions of Australians are still scraping by on a minimum wage of $467.40 a week, less than double median weekly rent of a two-bedroom unit in Sydney or Melbourne."
She has recently published a book, Dirt Cheap: Life at the Wrong End of the Job Market (Pan MacMillan, 2005) which describes this journalist's 12-month undercover work in low paid domestic and cleaning jobs. The book is an eye-opener about how exploitative work relations are at the lower end of the scale and of how much worse they will get. The National Dividend will lift such people from the poverty trap in which they are in.
Most importantly, social credit represents a mechanism for revitalising national economies and disarming economic globalisation, which as Graham Strachan brilliantly describes in his book 22 Steps to Global Tyranny (available from the League Book Services) is destroying the foundations of Western Christian civilisation.
Guest Workers to 'Prop Up' Economy
The Weekend Australian 5-6 March 2005 contains a lead article with the above heading. The article begins:
"Hundreds of thousands of unskilled foreigners are propping up the economy as pressure mounts on the Howard government to create a contentious new short-stay visa category to allow migrant workers to fill growing job vacancies." Needless to say, social credit policies will never allow this form of national and racial suicide to flourish, as it now does.
This paper has been only a brief 'cook's tour' of the philosophical foundations of Social Credit, but having a theoretical answer to our problems gives us hope that we will find the right strategies to make theory a reality. The League offers a comprehensive range of books on Social Credit, including all of the major works by C.H. Douglas and our own Eric Butler. A good starting point for beginners - and more advanced readers wanting a different perspective - is an excellent series of books by Anthony Cooney: Clifford Hugh Douglas 1996, Social Credit:Asterisks 1995, and his more recent Social Credit: Obelisks 2003.


COCHABAMBA! WATER WAR IN BOLIVIA

Bravo! To the Bolivian People!
There are certain human needs that are so basic, that in a civilized society, to be deprived of such is nothing less than criminal. One of these needs is water. In a democracy, if citizens are deprived of water, then that democracy must be taken back. Control must be returned to those whom the democracy is intended to serve; the people. This exact scenario occurred during April 2000 in the city of Cochabamba, Bolivia. It is a success story, which led to victory for the masses in Cochabamba. This triumph is now referred to as "The Water War" and has inspired activists in social movements around the world.
The Water War was a ground-breaking victory against the life-sapping effect of globalisation in Latin America. A recent publication by South End Press entitled: "Cochabamba! - Water War in Bolivia" by Oscar Olivera in collaboration with Tom Lewis is a first-hand account of that victory. Featuring perspectives from water activist and prominent labor leader Oscar Olivera, "Cochabamba" is a four-part work covering various aspects of The Water War, and its resulting social and political outcomes.
Bolivia is a nation that is land locked and isolated; located in the heart of South America. Known as the poorest country in South America, it's also a nation that I've had the privilege to visit for the first time in January 2005. With a population of 8.5 million, about 60% of Bolivians are of indigenous descent, living within cultural traditions stretching back to the Inca. Bolivians are intensely proud of their deep historical roots. Their history, however, also includes an unfortunate pattern of being repressed and exploited by foreign invaders. This pattern continues today as a result of economic policy changes implemented back in 1985.
In that year, President Victor Paz Estenssoro issued a proclamation known as DS21060. This proclamation destroyed the unions in Bolivia, and privatised the nation's state-owned industries - including water providers, mining companies, petroleum, telecommunications, railroads, and airlines. Without conferring with the desires of Bolivian citizens, political elites sold off the best of Bolivia to profiteering transnational corporations. As Olivera explains in Part One of Water War: "As a result of corporate globalisation, we Bolivians have been stripped of our material inheritance and natural resources."
The Tide Changed
The new privatisation under the proclamation caused many damaging changes. Salaries were pushed down. Lay-offs, and temporary employment status became the norm. Health insurance and pension benefits were steadily reduced and/or eliminated. For years, the working classes remained powerless and inactive in the face of such declining standards of living. But in 2000, the tide changed.
One year earlier, the government had signed an exclusive water contract with transnational corporation: "Aguas del Tunari." With a majority interest owned by foreign nationals, Aguas del Tunari was essentially run by non-Bolivians. This fact was not problematic. What did become an issue; however, was that the government's contract with Aguas del Tunari guaranteed a 16% rate of return per year on the corporation's investment (regardless of how it would be achieved).
What resulted was an increase in water prices at rates as high as 300%. Moreover, control of other water sources in Cochabamba was seized under a law stipulating that only the contracted company could distribute water.
As Olivera writes: "Water is a right for us, not something to be sold. The right to water is also tied to traditional beliefs for rural people, as it has been since the time of the Inca."
The burdens placed upon Cochabambinos was evidence of the level of indifference that the Bolivian government and Aguas del Tunari had toward the general populous. Without any reform in sight, in April 2000 the masses took to the streets. The protest brought the city to a standstill; uniting peasants, environmental groups, teachers, and blue-collar workers under a single demand: the return of water to the people. The Water War officially ended months later, with the expulsion of Aguas Del Tunari from Cochabamba.
Authentic Participatory Democracy
Olivera writes: "This new alliance, which blocked the highway, took and occupied the main plaza, and recovered our water, points the way forward."
Aguas del Tunari was replaced by a new model for managing water resources. Instead of a handful of out-of-touch political elites dictating policy, new representatives were put in place. These representatives derived from local neighbourhood committees, urban and rural organizations, and unions. Doing so essentially returned decision-making power back to the citizens of Cochabamba. What emerged - in the case of water management - was an authentic, participatory, and direct democracy. This victory brought to the surface of Bolivian conscious an alternative to privatisation.
Because of The Water War victory, the working class and rural inhabitants of Bolivia are no longer willing to sit on the side-lines while profit-engrossed transnationals and compromised politicians exploit national resources. As most Bolivians now realize, those resources are the last opportunities that the impoverished masses have for securing a better life.
Since April 2000 there have been hundreds of protests on many social issues. But most significant is the new struggle for hydrocarbon rights, or what is described in the second half of Olivera's work as "The Gas War."
The conflagration of "The Gas War" stems from the recent discovery of the second largest gas reserves in South America, located under Bolivian soil. The process of extracting this valuable asset has begun. But in an act against the will of the people, the political elite has given the green light for rich transnationals to stake out rights to this source of wealth. What is at stake is an estimated 52.3 trillion cubic feet of gas reserves valued at the conservative figure of $120 billion.
But with the reserves under foreign control, the revenue returned to Bolivia is, and will continue to be, far below market value. In addition, this revenue is being channeled into the coffers of corrupt politicians, and the gas itself to rich first-world nations. As Olivera describes: "What could be a source of re-birth for the productive capacity of the nation is, for now, only a source of profits and private fortunes for a handful of capitalists. The private ownership of petroleum and natural gas by these businessmen constitutes, without any doubt, the strangulation of one of the greatest opportunities the nation has ever had to finance and to sustain the type of productive growth that can benefit the population, satisfy our needs, and fulfil our right to a dignified life."
This new Gas War is a very significant event in Bolivia, and in South America in general. The privatisation of key industries has happened throughout the continent to the disadvantage of those who are already on the losing end. On March 7, 2005 (one week before this essay was written) Bolivian president Carlos Mesa, resigned from his position in recognition of being unable to fulfil the central demand for a new hydrocarbon law. This recent event is one of many developments in a state of upheaval that has erupted in Bolivia since January of this year. In short, there is a nationwide push underway to reclaim hydrocarbon reserve rights (among other very legitimate demands).
The political and social future in Bolivia is uncertain at this point in time. Needless to say this upheaval is a very important event, which could potentially catalyse change throughout all of South America.
"Cochabamba - Water War in Bolivia" is of particular significance in understanding these rapidly unfolding events.
© Published by the Australian League of Rights, P.O. Box 27 Happy Valley, SA 5159