April 1997: Berkeley and Ruskin

Whether the number and welfare of the subjects be not the true strength of the crown? (1.130)
Whether [money's] true and just idea be not that of a ticket, entitling to power, and fitted to record and transfer such power? (3.89)
Whether current bank-notes may not be deemed money? And whether they are not actually the greater part of the money of this kingdom? (1.33)
Whether all circulation be not alike a circulation of credit, whatsoever medium (metal or paper) is employed, and whether gold be any more than credit for so much power? (3.10)
Whether it be not the greatest help and spur to commerce that property can be so readily conveyed and so well secured by a compt en banc, that is, by writing one man's name for another's in the bank book? (2.47)
Whether the sum of the faculties put into act, or, in other word, the united action of a whole people, doth not constitute the momentum of a State? (3.308) [Douglas would call this, more simply, productive capacity.]
Whether such momentum be not the real stock of wealth of a State; and whether its credit be not proportional thereunto? (3.309)
Whether there be any difficulty in comprehending that the whole wealth of the nation is in truth the stock of a national bank? (3.84)
Whether the public aim ought not to be, that men's industry should supply their present wants, and the overplus be converted into a stock of power? (2.120)
Whether the public aim in every well-governed State be not that each member, according to his just pretensions and industry, should have power? (1.8)
Whether, as seed equally scattered produceth a goodly harvest, even so an equal distribution of wealth does not cause the nation to flourish? (1.214)
Whether the political body, any more than the natural, can thrive without a proportionable circulation through the minutest and most inconsiderable parts thereof? (3.190)

These queries make at least four vital points: (1) money is not wealth but a bookkeeping system for wealth, (2) a legal claim on wealth is power, (3) industry produces more wealth than people can immediately consume, and (4) political freedom consists of this power's being generally distributed. Thus, Berkeley was nibbling around the edges of social credit without quite grasping its full implications. The reason? He failed to recognize that money and prices are one system. Nowhere does he question the system of market pricing. He puts his faith in national issue of credit, in the form of a national bank.

St. George's Company

The most trenchant contemporary critic of nineteenth-century capitalism was not Marx but Ruskin. John Ruskin has unfortunately acquired a bad name with some good writers (like Ivor Benson) due not to his own work but to the unfortunate association of his name with Cecil Rhodes in Carroll Quigley's Tragedy and Hope, a remarkable thirteen-hundred-page history of the twentieth century published in 1966. Quigley states that Ruskin inspired his aristocratic auditors with the idea of spreading their class ideals to all the nations of the Empire and that Rhodes and some other Ruskin enthusiasts started a secret society for that purpose in 1891, with the fortune Rhodes had made in South Africa (pp. 130-31). The Anglo-Boer War of 1899 was due to the efforts of this group, which also managed the war's publicity by getting one of its members, Flora Shaw, named head of the Times colonial section. Ruskin would only have been disgusted.
    It would not be the only time his ideas were impressed to serve others' divergent causes. Socialists like William Morris combed Ruskin's critiques of capitalism to serve their pet cause, although Ruskin himself declared, "The first necessity of all economical government is to secure the unquestioned and unquestionable working of the great law of Property--that a man who works for a thing shall be allowed to get it, keep it, and consume it, in peace" (Munera Pulveris 67). [I have since come to a better appreciation of Morris. M.L.]
    Ruskin had founded his own nonsecret society, St. George's Company, with its own newsletter, Fors Clavigera (Nail-Wielding Fortune), for those who shared his convictions and wished to put them to the test. Yet the partial list of Companions that Ruskin published in December 1883 does not include Rhodes or any of his group (Fors Clavigera 93, postscr.). The mature Ruskin's views on British cultural imperialism are well captured in his comments that same year on an account of Sir Walter Scott's meeting with Mungo Park in Scotland. Park reveals to Scott that he is contemplating returning to Africa. "With what motive?" asks Ruskin.
    "He is at that time practising as a physician among his own people. A more sacred calling cannot be. . . . But when Scott expressed surprise that he could intend again to re-visit those scenes, he answered that he would rather brave Africa and all its horrors, than 'wear out his life in long and toilsome rides over the hills of Scotland, for which the remuneration was hardly enough to keep soul and body together'.
    "I have italicized the whole sentence, for it is a terrific one. It signifies, if you look into it, almost total absense of the instinct of personal duty,--total absense of belief in the God who chose for him his cottage birthplace, and set him his life-task beside it; absolute want of interest in his profession, of sense for natural beauty, and of compassion for the noblest poor of his native land" (Fors Clavigera 92).

Whence Comes Money?

Ruskin's most ambitious economic work bears the satirical title Munera Pulveris (Gifts of Dust) and was published in 1863. Here he sketches out a program that clearly makes him a forerunner of Douglas, though Douglas nowhere acknowledges the debt and was perhaps unaware of it.
    Already in 1857, Ruskin had read The Querist and grasped the nature of money. Money is "only a transferable document . . . giving claim, at sight, to some definite benefit or advantage, most commonly to a certain share of real property. . . . The money is only genuine when the property it gives claim to is real, or the advantages it gives claim to certain; otherwise, it is false money, and may be considered as much 'forged' when issued by a government, or a bank, as when by an individual" (A Joy Forever 148).
    Later, in Fors Clavigera, he would ask the key question, Where does money come from? "Such golden rain raineth not every day, but in a showery and capricious manner, out of heaven, upon us; mostly, as far as I can judge, rather pouring down than filtering upon idle person [those of his own class], and running in thinner driblets . . . to the actual workers. But where does it come from? and in times of drought between the showers, where does it go to? 'The country is getting rich again', says the Spectator. . . . When, last 25th of June, it was poor,--what . . . had become of the money? Was it verily lost? . . . When we are in a panic about our money, what do we think is going to happen to it? [Can no beloved physician guard it against] fits of an apoplectic character, alarming to the family? . . . To me the strangest point in the whole matter is that though we idlers always speak as if we were enriched by Heaven, and became ministers of its bounty to you; if you ever think the ministry slack, and take to definite pillage of us, no good ever comes of it to you; but the sources of wealth seem to be stopped instantly; . . . while on the contrary, as long as we continue pillaging you, there seems no end to the profitableness of the business (Fors Clavigera 4).
    Ruskin never did answer this question, because--although he could have learned it from Berkeley--he failed to recognize that all credit was money. Yet even to ask the question is a great deal.
    Writing before the age of the electric motor and the internal combustion engine, which made power cheap and portable, Ruskin had little love for the expensive and necessarily centralized steam power of his day and found it fit only for colossal works on other continents. But in 1876, he did direct readers to pages 214-24 of Threading My Way by Robert Dale Owen, son of the founder of New Lanark, wherein is found a calculation that the machine-saved labor in producing English textile fabrics amounted, at the time of writing (1874), to the labor of six hundred million adults under the conditions of a century before. Owen recalls with bitterness the huge promise of the early years of the industrial revolution and wonders what happened to it (pp. 217-18).

The Leisure State

Ruskin further anticipated Douglas by calling attention to the myth of "employment" as a goal: "I should be glad if the reader would first clear the ground for himself as far as to determine whether the difficulty lies in getting the work or getting the pay for it. Does he consider occupation itself to be an expensive luxury, difficult of attainment, of which too little is to found in the world? or is it rather that, while in the enjoyment even of the most athletic delight, men must nevertheless be maintained, and this maintenance is not always forthcoming? We must be clear on this head before going farther, as most people are loosely in the habit of talking of the difficulties of 'finding employment'. Is it employment that we want to find, or support during employment? Is it idleness we wish to put an end to, or hunger? We have to take up both questions in succession, only not both at the same time" (Unto This Last 54n.).
    On the contrary, labor taken by itself is a negative quantity, a cost. Labor is "the quantity of 'Lapse', loss, or failure of human life, caused by any effort. It is usually confused with effort itself, or the application of power. . . . But labour is the suffering in effort. . . . Everything else is bought and sold for Labour, but Labour itself cannot be bought nor sold for anything, being priceless. This being the nature of labour, the 'Cost' of anything is the quantity of labour necessary to obtain it" (Munera Pulveris 59-60).
    Thus, the aim of political economy is to spare labor and to pass these savings on to consumers in the form of cheaper goods: "If the demand is constant, the relative prices of things [should be] as their cost, or as the quantities of labour involved in production" (ibid. 63). This complementary manner of advance is the natural result of the growth of technology and the increment of association (division of labor). But less work combined with correspondingly cheaper goods is the same thing as leisure, which is the real goal.
    "I have not the least doubt," concluded Ruskin, "that under St. George's rule, when none but useful work is done, and when all classes are compelled to share in it [i.e., leisure is to be shared], wages may indeed be so high, or which amounts to the same thing as far as our present object is concerned, time so short, that at least two, if not three days out of every week . . . may be devoted . . . to the contemplation and study of the works of God [in schools and museums]" (Fors Clavigera 59). Ruskin saw here an extension of the promise of the Sabbath.

A Tantalizing Possibility

As a critic and collector of art, Ruskin was especially concerned by the proliferation of goods of inferior quality and even "goods" of negative quality, destructive of life. He hoped the government would discourage the former by competing in the market with good and useful things of a guaranteed standard.
    "Suppose it should turn out," Ruskin at last ventures, "that a true government set to true work, instead of being a costly engine, was a paying one? that your government, rightly organized, instead of itself subsisting by an income-tax, would produce its subjects some subsistence in the shape of an income dividend?--police and judges duly paid besides, only with less work than the state at present provides for them" (Munera Pulveris 129).
    Ruskin worked out this possibility in an exceptional passage that is the centerpiece of Munera Pulveris and that needs to be quoted at length:

Let us suppose a national store of wealth, composed of material things either useful, or believed to be so, taken charge of by the Government, and that every workman, having produced any article involving labour in its production, and for which he has no immediate use, brings it to add to this store, receiving from the Government, in exchange, an order [i.e., money] either for the return of the thing itself, or of its equivalent in other things, such as he may choose out of the store, at any time when he needs them. . . .
    We hitherto consider the Government itself as simply a conservative power, taking charge of the wealth entrusted to it. But a government may be more or less than a conservative power. It may be either an improving, or destructive one.
    If it be an improving power, using all the wealth entrusted to it to the best advantage, the nation is enriched in root and branch at once, and the Government is enabled, for every order presented, to return a quantity of wealth greater than the order was written for, according to the fructification obtained in the interim. This ability may be either concealed, in which case the currency does not completely represent the wealth of the country, or it may be manifested by the continual payment of the excess of value on each order, in which case there is . . . a perpetual rise in the worth of the [whole] currency, that is to say, a fall in the price of all articles represented by it.
    Now, if for this conception of a central Government, we substitute that of a body of persons occupied in industrial pursuits, of whom each adds in his private capacity to the common store ('so that the store itself . . . becomes disseminated private property, each man giving, in exchange for any article received from another, a general order'--Ruskin's note), we at once obtain an approximation to the actual condition of a civilised mercantile community. . . .
    Observe that in both conditions, that of a central Government-holding, and diffused private-holding, the quantity of stock is of the same national moment. (Munera Pulveris 40-44, our italics)

So having built up a picture of a great government store, Ruskin decentralizes it into a market and says that the same argument applies. He comprehended that the issuer of money is the de facto custodian of the national wealth whether it gathers it into a public store or not. Thus, we can go back and reread this selection substituting for the word Government the word Market.
    Ruskin scarcely realized what he had stumbled across; and the words "this conception" may well refer more particularly to the "destructive" alternative that we have omitted. Nevertheless, the text as we have given it, with Market substituted for Government, is identical with Douglas's analysis. We have added the word whole because Ruskin is not concerned here with the size of the monetary unit: he is concerned with what the country's income will buy, or what a week's pay will buy. The fall in prices he envisions is predicated on holding a week's pay constant: it is not deflation, or shortening of the money supply (which entails a fall in both prices and wages).
    People taught to think solely in terms of supply and demand (and that means almost all of us) will object that the currency (effective demand) has to represent the wealth of the whole country (supply) because prices will drop until the goods sell. However, that is not the case, because the seller, in the long term, has to recover his costs and make the arithmetic balance. So what happens? Ultimately, the issuer of money will create money and lend it out to public authorities, foreign countries, and individuals; and the goods will be bought with this borrowed money. Thus, the market's ability to give more for less is "concealed" by debt. But this takes us beyond Ruskin.
    Douglas once compared a capitalist enterprise to a pawn shop, and we can learn something by comparing the entire economy to a hatcheck girl and imagine that people make their own hats. The "wages" for "producing" one hat is one claim ticket, and the "price" of one hat is also one claim ticket. If you think of the ticket as a compensation for the labor, and it takes one day to make a hat, and a new process doubles the efficiency, then for the same "wages" people will produce twice as many hats, and it should be possible to lower the "price" to one-half of a claim ticket. But suppose people simply don't wear out hats that fast. Then, blessed with abundance, instead of working all day as before, they will wish to take part of the day off to contemplate and study the works of God in schools and museums--in short, celebrate their Sabbath.
    The social credit movement has not called much attention to this material. But it is important because it shows that Douglas was not just a crank with a quirky interpretation of practical Christianity. Rather, his ideas have antecedents; and he developed further a single, continuous tradition.