6 minutes reading time (1215 words)

Debt and Distortion

    I would like to expand at a more fundamental level on how the debt-money system distorts reality.

    In his Control and Distribution of Production Douglas begins by distinguishing between what he calls real credit and financial credit:

Real Credit is a correct estimate of the rate, or dynamic capacity at which a community can deliver goods and services as demanded.

Financial Credit is ostensibly a device by which this capacity can be drawn upon. It is, however,  actually a measure of the rate at which an organisation or individual can deliver money. The money may or may not represent goods and services.1

    For the majority of people their access to real credit (goods and services) comes through financial credit which is gotten through employment that distributes incomes. It is important to keep in mind that it is the access to the real credit that enlists the cooperation of people in any economy. The pursuit by power for full employment is disingenuous for it knowingly misrepresents the will of people. What they want is goods and services, which means the money to buy them, but conditioning has caused them to express this as the desire for work.

    This training has also given us the habit of expressing our real credit situation in terms of financial credit language. For instance, the collapse of bee colonies in America is expressed in dollar losses to the Californian almond industry. The implications of colony collapse are dire, and I shouldn’t need to say that that assessment has nothing at all to do with loss of cash flow to almond growers. One has to wonder if this sort of statistical reasoning, the conversion of facts into financial figures, is designed to miss the point.

    If you have a mind of your own and take any notice of the utterances of economists (not two things that naturally go together) you would have to agree that no profession is so deft at missing the point. This is because years of training have provided them with a special sort of anti-logic for the conversion of all value into a set amount of currency.  If you asked an economist if they enjoyed their dinner they would no doubt apply the formula ‘you get what you pay for’ as the basis for their felt degree of satisfaction.

    This kind of newspeak filters down from the financial heights and pervades the reasoning of ordinary people. Conversations about the real wealth of nations proceed in terms of measures of GDP, the balance of trade, trillions, billions, millions and the like. Concern about the threat mining companies present to quality of water in the Artesian Basin is assuaged with glad predictions of a rise in local employment and the sorely needed credit of foreign investment.

    Says Robertson, ‘Banks create “money” by book entries which are the equivalent of a debt against the community. The specific function of the banking system is the creation of debt, or “negative money”!'2 For the financial elite the nomenclature of negative money is the language of control and the extent to which that language is used is the measure of the reach of that control. Because money is debt created by banks the reference to real wealth by use of money language legitimises the claim of banks to the ownership of that wealth. The banks are the gatekeepers to our wealth which they, by control over financial credit, claim as theirs. Under these arrangements there can be no economic security because continual application must be made to financial authorities to live.3 To live we must borrow, that is, commit our future incomes, our wages per hour, to finance.

    The proper function of the monetary system is as a device for the measurement and distribution of the real wealth. Like a barometer does not determine atmospheric pressure, neither should the money system determine conditions in the real economy. It is a compelling indictment of the present influential position of the money device when Bill Mollison can say, ‘Third world debt and western world over-production are both primary factors in soil collapse.’4

     In Chapter 1 of Understanding our Economy, economics is described as being ‘primarily concerned with activities that are directed towards solving the problem of the scarcity of resources.’5 What scarcity? The shops are full and going out of business because they can’t sell, not because they can’t keep their stock up to demand, and surely the vast advertising industry screaming at us incessantly to consume! consume! is evidence against a condition of scarcity. Observe the waistlines of your countrymen and try to convince yourself there is not enough, and how could the spectacle of unemployment persist in an industrial nation suffering from scarcity, yet every orthodox authority bleats about it continually. Contemplate the potential of one pumpkin seed in the right conditions, and then the number of seeds in every pumpkin. You must conclude that the basic assumption of orthodox economics, to manage scarcity, is quite false.

    Material scarcity is a myth, yet there is a scarcity of something. There is a scarcity of positive money in the hands of the community. If distributed properly this positive money would change the situation in two crucial ways. It would enable finance to report the truth about our real wealth and recognise the community as the rightful owners of it.

    What is required is a revolution of thought that rejects the language of the dismal science and releases the power of individuals in free association to get the results intended, measured in terms of satisfaction. The problem of the New Economics is the problem of conservation and sound management of abundance. That change in thinking might come around as

… a spreading awareness of the possibilities of human existence, coupled with a growing sense of the causal nature of the universe, that together inspire, first in individuals, then in communities and entire nations, an entirely new attitude toward life.

The effect of this sudden awareness, this sudden fruition of consciousness , is to produce in the so-called backward areas of the world, all at once, a pervasive and urgent desire for radical change, based on the new insight, startling in its simplicity, that the conditions of life that had seemed   immutable can, after all, be changed.5

    This economics is not a reflection of reality but the power seeking policy of the financial gatekeepers. On either side of the gate a fence extends a short way into a dense mist of bad language and untried premises. The assumption of approaching people is that the fence completely encircles our real wealth and there is no way to it but through the gate. Douglas' revelations clear the mist and show us how short a distance we must go to life more abundant.

    See the socialcredit.com.au libraries for more information.

References

  1. Douglas, C.H. 1922. The Control and Distribution of Production. The Information Council, Brunswick.

  2. Robertson, T. 1975. Human Ecology, The Science of Social Adjustment. Christian Book Club, California.

  3. Douglas. C.H. 1951. The Monopoly of Credit, Third Revised Edition. Tidal Publications, Sydney.

  4. Mollison. B. 1988. Permaculture, A Designers’ Manual. Tagari Publications, NSW.

  5. Tuffley, E.J. 1997. Understanding Our Economy, Preliminary Course. Rigby Heinemann, Brisbane.

  6. Taber, R. 2002. War of the Flea, The Classic Study of Guerilla Warfare. Potomac, New York.

 

2
Confessions of Australia's Central Bankers
The Dog Exists
 

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