Initial reflections on Douglas and MMT:
Besides racism against Jews, accusing them of collectivism, and his unreasonable aversion to socialism, the views of Douglas reflect a desire to provide the majority of people a decent life-style without causing economic shocks that lead to economic stagnation, depression, and unpredicted shortages as a consequence of a lack of economic foresight.
The idea of social credit does not inherently conflict with socialist policy, and Douglas himself acknowledges Soviet Russia’s policy of providing an increased money supply for its people. In fact, the US broke from the Gold Standard during the Civil War and Reconstruction, only to return following a collapse in the railroad industry in 1873. Earlier, they had done the same during the American Revolution. The decision of the US, however, arose from the needs of the government at war rather than with the purpose of raising the purchasing power of the workers. Still, the rise in power of the Civil War Greenback goes to show that the currency, unbacked by any metal, eventually would have surpassed even Gold:
“In 1862, the greenback declined against gold until by December gold was at a 29% premium. By spring of 1863 the greenback declined further, to 152 against 100 dollars in gold. However, after the Union victory at Gettysburg the greenback recovered to 131 dollars to 100 in gold. In 1864 it declined again as Grant was making little progress against Lee who held strong in Richmond throughout most of the war. The Greenback’s low point came in July of that year: 258 greenbacks equal to 100 gold. When the war ended in April 1865 the greenback made another remarkable recovery to 150.[9] The recovery began when Congress limited the total issue of greenback dollars to $450 million. The greenbacks rose in value until December 1878, when they became on par with gold. Greenbacks from thereon became freely convertible into gold.[10]“
If in 1878, the Greenbacks had not become freely convertible into gold, their value could have risen above that of the gold-backed currency. The decision to return a more powerful currency back to the gold standard goes to show that the gold standard does not exist in order to provide stability and strength. It does not empower the government, since to print paper that becomes more valuable over time than gold would give the government more power. What the gold standard does, why governments favored gold and Marx proposed gold only as a backing for currency used for foreign trade, has to do with the real value of the gold standard. This has to do with the drive to monopolize markets (or defend against shortages produced by monopolistic practices), and the requirements of large stockpiles of reserve capital in order to suddenly act at any given moment to capture a significant share of the world market of some product experiencing supply shocks, raise prices, and rob other countries through speculation and manipulation. Only a large gold reserve, or some other strong store of value, could provide this weapon of economic warfare.
With this in mind, Douglas’ proposal along with MMT theory amounts to a form of pre-Marxist socialism. It disregards the history of the class conflict as the source of progress and searches for an undiscovered ideal to take its place. Assuming the government printed the money with the aim of increasing the workers’ purchasing power, then it could in fact, through this method, increase the purchasing power of the workers. Arguing otherwise repeats the same argument that Marx answers in Value, Price, and Profit. In that pamphlet, Marx responds to a Communist, Citizen Weston, that argues that the struggle through strikes and contract negotiations over wages has no effect. The Capitalists just raise the prices, replace the workers with cheaper workers or machines, or find some other way to recuperate their losses. In fact, Marx argues, when workers hold back their work, they force the capitalists to give up some of the profit that they extract from the workers. If the capitalists raise prices, they can then strike again so that wages remain higher relative to prices. In the end, the deciding factor depends on the level of organization and the determination to fight of the workers relative the level of organization and determination of the employers.
Another factor, more fully explored by Trotsky, explains the difficulty such a government, using monetary policy to raise workers’ purchasing power, would face competing in the world market. The pressure exerted by competing powers would break that government down until an international federation of workers’ states implemented a pro-worker policy on a world scale. Yet, as Marx argued, this would not represent a useless effort. This would increase the political power of workers over the state in relation to imperialism, the drive to sell the “excess” products around the world and extract profits from every corner. It would also strengthen any federation of workers’ states and independent former colonies relative to any imperialist alliance.
The need for MMT, according to Douglas, comes from the difference between the goods produced by the capitalist system and the purchasing power of the workers. Other governments would use that “excess” as exports and compete with local producers in other countries with their products. A government that followed Douglas’ policy could, in theory, raise workers’ purchasing power in that country, but this would lead to greater imports and fewer exports. The result would be a decline in the value of the currency, and this would return the purchasing power back to the capitalists, but instead to capitalists of another country, one which had served capital rather than workers.
His proposal serves as an answer, not to socialism in general, but to the idea that taxation and redistribution could resolve the problem. In fact, it could not, since, as Douglas argues, the redistribution of the oligarchy’s wealth would only lead to a small increase of wealth on a per-capita basis while making the purchase of large machines and other capital necessary for large-scale production impossible, thereby exacerbating the problem of unemployment or creating a bureaucratic system of digging holes and filling them while real production needs went unmet.
Nick Beams’ answer to Douglas and MMT in general will not satisfy economists or the working class, who also think about macro-economics, as a reply. Where Douglas fails does not stem from mistakes about monetary theory as an answer to the limitations of taxes and redistribution. His points fall in line with both Marxism (against the gold standard) and the Soviet policy under Lenin and Trotsky. (Trotsky spoke of the necessity of “a healthy circulation of money” and said, “At the same time the more elementary functions of money, as measures of value, means of exchange and medium of payment, are not only preserved, but acquire a broader field of action than they had under capitalism.”) In essence, Marxism does not trash all economic thought discovered under capitalism but actually gives it a “broader field of action.”
Marxists must reply to Douglas by saying, “We have heard, and we agree. Who else will bring these policy proposals into action but socialists with the support of the working class majority?” The idea is that a state bank should expand the money supply by giving the money directly to the poor rather than to major banks who then ease credit serves to redistribute the wealth. This would spur economic activity that would produce necessities that the poor need while providing them with work in producing those necessities. Providing the money to banks, whether or not it is backed by gold, only slows down the economy while strengthening monopoly capitalism and imperialist war. Douglas’ theories, in the end, represent a plan for the slaves they may only use once they have reached freedom.
The gold standard did not enslave them, capitalism and the private ownership of the means of production did it. As Trotsky argued, the gold standard has a place under socialism as well, as it produces a stable currency, enabling an accurate measurement of economic activity. This could work under an unbacked currency as well, since any price could be converted into a gold standard by adding an extra calculation, dividing by the price of gold. This measure could give monetary policy makers at the state bank clues on whether to circulate more or less paper money.
The government could mitigate the downside of the gold standard, the massive stockpiles of gold in the hands of a state bureaucracy, by distributing a large proportion of the gold stockpiles to the people at regular intervals so that they may take part in protecting the wealth of the nation. They could also help determine the price of gold relative to the currency through greater circulation of gold. This would eliminate the incentive for the state to fix the price lower while accumulating its stockpile and fix the price higher when then spending the stockpile to gain some sort of economic advantage by wreaking havoc on the market. It would protect the people from bureaucracy, such as in the Soviet Union, dominating national reserves, redistributing goods to themselves, and eventually privatizing the state-owned means of production.
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Revolutionary theory of capitalism vs. Theory of revolutionary demands
Demands of the Communist Party in Germany, March 1848
Karl Marx, Karl Schapper, H. Bauer, F. Engels, J. Moll, W. Wolff
(https://www.marxists.org/archive/marx/works/1848/03/24.htm)
“10. All private banks will be replaced by a state bank whose bonds will have the character of legal tender.
This measure will make it possible to regulate credit in the interests of the whole people and will thus undermine the dominance of the large financiers. By gradually replacing gold and silver by paper money, it will cheapen the indispensable instrument of bourgeois trade, the universal means of exchange, and will allow the gold and silver to have an outward effect. Ultimately, this measure is necessary to link the interests of the conservative bourgeoisie to the revolution.”
Two forms of Money: An Exchange Value vs. a Use-value, Conversion into Capital and Exploitation vs. Measure of value, Means of Exchange, and Medium of Payment
Money or gold-equivalent are not the products of labor but are exchanged for the products for the purpose of future exchange for other commodities.
Sinking Nick Beam’s theory with a single volley, Marx wrote that, “this dogma of a fixed currency is a monstrous error, incompatible with our everyday movement.” From Value, Price, and Profit, Chapter 3, Wages and Currency:
“From our friend Weston’s standpoint this is an unsolvable riddle. Looking somewhat deeper into this matter, he would have found that, quite apart from wages, and supposing them to be fixed, the value and mass of the commodities to be circulated, and generally the amount of monetary transactions to be settled, vary daily; that the amount of bank-notes issued varies daily; that the amount of payments realized without the intervention of any money, by the instrumentality of bills, cheques, book-credits, clearing houses, varies daily; that, as far as actual metallic currency is required, the proportion between the coin in circulation and the coin and bullion in reserve or sleeping in the cellars of banks varies daily; that the amount of bullion absorbed by the national circulation and the amount being sent abroad for international circulation vary daily. He would have found that this dogma of a fixed currency is a monstrous error, incompatible with our everyday movement. He would have inquired into the laws which enable a currency to adapt itself to circumstances so continually changing, instead of turning his misconception of the laws of currency into an argument against a rise of wages.”
Speaking of a similar policy to increasing payments to workers, reducing the hours of the working day, Marx wrote:
“This was one of the greatest economical changes we have witnessed. It was a sudden and compulsory rise of wages, not in some local trades, but in the leading industrial branches by which England sways the markets of the world. It was a rise of wages under circumstances singularly unpropitious. Dr. Ure, Professor Senior, and all the other official economical mouthpieces of the middle class, [The aristocracy was the upper class of Great Britain, while the capitalists composed what was known to Marx as the middle class] proved, and I must say upon much stronger grounds than those of our friend Weston, that it would sound the death-knell of English industry. They proved that it not only amounted to a simple rise of wages, but to a rise of wages initiated by, and based upon, a diminution of the quantity of labour employed. They asserted that the twelfth hour you wanted to take from the capitalist was exactly the only hour from which he derived his profit. They threatened a decrease of accumulation, rise of prices, loss of markets, stinting of production, consequent reaction upon wages, ultimate ruin. In fact, they declared Maximillian Robespierre’s Maximum Laws[1] to be a small affair compared to it; and they were right in a certain sense. Well, what was the result? A rise in the money wages of the factory operatives, despite the curtailing of the working day, a great increase in the number of factory hands employed, a continuous fall in the prices of their products, a marvellous development in the productive powers of their labour, an unheard-of progressive expansion of the markets for their commodities.”
Footnote 1: “The Maximum Law was introduced during the Great French Revolution in 1792, fixing definite price limits for commodities and standard rates of wages. The chief supporters of the Maximum Law were the so-called ‘madmen’ who represented the interests of the urban and village poor. Robespierre, the leader of the Jacobin Party, introduced this law at a time when the Jacobins as a result of tactical considerations had formed a bloc with the ‘madmen.’”
You can see that Marx compared the limitation in hours of the working day with the limitation on prices and standard wage rates. These had the effect of increasing production by expanding the market for factory goods produced through the real increases in wages.
The Revolution Betrayed, Ch. 4: Money and Plan
Leon Trotsky
(www.marxists.org/archive/trotsky/1936/revbet/ch04.htm)
“The deathblow to money fetishism will be struck only upon that stage when the steady growth of social wealth has made us bipeds forget our miserly attitude toward every excess minute of labor, and our humiliating fear about the size of our ration…
“…The nationalization of the means of production and credit, the co-operative or state-izing of internal trade, the monopoly of foreign trade, the collectivization of agriculture, the law on inheritance – set strict limits upon the personal accumulation of money and hinder its conversion into private capital (usurious, commercial and industrial). These functions of money, however, bound up as they are with exploitation, are not liquidated at the beginning of a proletarian revolution, but in a modified form are transferred to the state, the universal merchant, creditor and industrialist. At the same time the more elementary functions of money, as measures of value, means of exchange and medium of payment, are not only preserved, but acquire a broader field of action than they had under capitalism.”
Economic Planning vs. Economic measurements and calculations
“An a priori economic plan… is not a fixed gospel…”
“…For the regulation and application of plans two levers are needed: the political lever, in the form of a real participation in leadership of the interested masses themselves, a thing which is unthinkable without Soviet democracy; and a financial lever, in the form of a real testing out of a priori calculations with the help of a universal equivalent, a thing that is unthinkable without a stable money system.”
Commodity Production as a Progressive Step in History”
“The liquidation of the consummatory peasant economy, and at the same time of the shut-in family life, means a transfer to the sphere of social interchange, and ipso facto money circulation, of all the labor energy which was formerly expended within the limits of the peasant’s yard, or within the walls of his private dwelling. All products and services begin for the first time in history to be exchanged for one another.”
Nick Beams, Modern Monetary Theory and the crisis of capitalism: Part one
“According to Kelton, the social ills created by capitalism are the result not of its objective contradictions, but of incorrect thinking. She maintains that economic policies which prioritize human need and public interest are possible within capitalism, if only ‘our self-imposed constraints’ are abandoned.”
C. H. Douglas, Georg Friedrich Knapp, both economists from the 1920s wrote after the founding of the Soviet Union and the socialist economy. Policy in a socialist state comes directly from “objective contradictions” instead of being “self-imposed.” These objective contradictions must produce a subjective response, which the leadership in a socialist state must impose on themselves and the rest of society.
In contradiction to Marx and Engles,Trotsky explicitly favors a gold-based currency:
“The raising of the productivity of labor and bettering of the quality of its products is quite unattainable without an accurate measure freely penetrating into all the cells of industry – that is, without a stable unit of currency. Hence it is clear that in the transitional economy, as also under capitalism, the sole authentic money is that based upon gold. All other money is only a substitute. To be sure, the Soviet state has in its hand at the same time the mass of commodities and the machinery for printing money. However, this does not change the situation. Administrative manipulations in the sphere of commodity prices do not in the slightest degree create, or replace, a stable money unit either for domestic or foreign trade.”
This claim to authenticity for gold comes from subjective bias, mainly the bias of those who produce, accumulate, and defend gold, heads of state, banks, and large corporations, whether appointed by capitalist boards or Soviets of questionably democratic authenticity. Marx and Engels demanded a state bank to cheapen money and regulate credit in the interests of the “whole people.” That meant abandoning a gold standard or even a dollar standard in order to make money freely available in abundance for the whole people. An objective measure of value, a legitimate socialist currency, would not allow for “the dominance of the large financiers.” Stockpiles of gold, silver, or any other “objective” measure of values should arouse suspicion in the people and strict regulation by the government to prevent their use as a means to dominate, obligate, or coerce economic activity. This dominance should come entirely from democratic institutions with the greatest protections possible for the freedom of the individual. If such stockpiles run counter to this principle, then their break-up and redistribution require planning and execution rather than their transfer over to bureaucratic state authority. In this way, as gold and silver find wider distribution, the value of money and democratic power will stabilize far better than through its storage in government vaults and secret or exclusive committees.
Trotsky criticized the Monetary Policy of the Soviet State:
“The subsequent curve of inflation from year to year is depicted in the following feverish series: 2.0 – 2.8 – 4.3 – 5.5 – 8.4! The final figure 8.4 billion rubles was reached at the beginning of 1933. After that came the years of reconsideration and retreat: 6.9 – 7.7 – 7.9 billion (1935). The ruble of 1924, equal in the official exchange to 13 francs, had been reduced in November 1935 to 3 francs – that is, to less than a fourth of its value, or almost as much as the French franc was reduced as a result of the war.”
He then criticized the new system of distribution:
“The most utopian views of the period of military communism were thus restored on a new economic basis – a little higher, to be sure, but alas still inadequate for the liquidation of money circulation. The ruling circles were completely possessed by the opinion that with a planned economy inflation is not to be feared. This means approximately that if you possess a compass there is no danger in a leaking ship. In reality, currency inflation, inevitably producing a credit inflation, entails a substitution of fictitious for real magnitudes, and corrodes the planned economy from within.”
The bureaucracy substituted the control of inflation with the criminalization of its mention.
“The most cautious references to inflation they likened to a state crime. With similar conscientiousness the authorities on occassion have accused teachers of breaking the rules of school hygiene while at the same time forbidding them to mention the absence of soap.”
This meant the chaotic destruction of money as a means of exchange while struggling against equal or average pay for the bureaucracy:
“Restoring “bourgeois norms” with one hand, they were destroying with the other the sole implement of any use under them. With the substitution of “closed distributors” for commerce, and with complete chaos in prices, all correspondence between individual labor and individual wages necessarily disappeared, and therewith disappeared the personal interestedness of the worker.”
Trotsky refers to the Platform of the Joint Opposition, which lists the following as a policy proposal:
“(8) Tax receipts alone cannot cover the continually growing demands of our national economy. Credit must become a more and more important lever in the distribution of the national income, along the lines of socialist construction, which assumes, above all, a stable currency and a healthy circulation of money.”
On collective agriculture and money:
“If you leave aside the collective farm aristocracy, the daily needs of the average peasant are still met to a greater degree by his work “on his own”, than by his participation in the collective. A peasant’s income from individual enterprises, especially when he takes up technical culture, fruit, or stock farming, amounts frequently to three times as much as the earnings of the same peasant in the collective economy.”
On distribution and prices:
“The budget and credit mechanism is wholly adequate for a planned distribution of the national income. And as to prices, they will serve the cause of socialism better, the more honestly they being [sic] to express the real economic relations of the present day.”
On the gold standard vs. bureaucratic subjectivism:
“In the period to come, there can be no talk of going over to the gold standard. Insofar, however, as the government, by increasing the gold reserve, is trying to raise the percentage even of a purely theoretical coverage; insofar as the limits of banknote emission are objectively determined and not dependent upon the will of the bureaucracy, to that extent the Soviet ruble may achieve at least a relative stability. That alone would be of enormous benefit. With a firm rejection of inflation in the future, the currency, although deprived of the advantage of the gold standard, could indubitably help to cure the many deep wounds inflicted upon the economy by the bureaucratic subjectivism of the preceding years.”
On piece-work payment and labor-time:
“Socialism could not be justified by the abolition of exploitation alone; it must guarantee to society a higher economy of time than is guaranteed by capitalism.”
“When the rhythm of labor is determined by the chase after the ruble, then people do not expend themselves “according to ability” – that is, according to the condition of their nerves and muscles – but in violation of themselves. This method can only be justified conditionally and by reference to stern necessity. To declare it “the fundamental principle of socialism” means cynically to trample the idea of a new and higher culture in the familiar filth of capitalism.”
The translation from socialism to communism will eliminate the sweatshop and piece-work payment, “as a relic of barbarism.”
ORIGINAL VERSION OF THE ARTICLE “THE IMMEDIATE TASKS OF THE SOVIET GOVERNMENT” April 28, 1918
Vladimir Lenin
(https://www.marxists.org/archive/lenin/works/1918/mar/23b.htm)
“It is estimated that currency notes to the value of about thirty thousand million rubles have been issued in Russia to date. Of this sum probably no less than twenty thousand
million, or maybe considerably more, are excess hoards unneeded for trade turnover, which are kept hidden away by members of the bourgeoisie and propertied classes for motives of self-interest—or class self-interest.
“The Soviet government will have to combine the introduction of labour conscription with the registration, in the first place, of people belonging to the bourgeoisie and propertied classes; it will have to demand truthful statements (declarations) concerning the amount of currency notes available; it will have to take a number of measures to make sure that this demand will not remain on paper; it will have to consider
transitional measures for concentrating all stocks of currency notes in the State Bank or its branches. Unless these measures are taken, the business of accounting and control
over production and distribution cannot be effectively carried through.”
Lenin argued that the government must concentrate all stocks of currency in the State Bank, based on a complete registration of and declarations from all people belonging to the bourgeoisie and propertied classes.
Collected Works Vol. 32
Vladimir Lenin
REPORT ON CONCESSIONS AT A MEETING OF THE COMMUNIST GROUP OF THE ALL-RUSSIA CENTRAL COUNCIL OF TRADE UNIONS
APRIL 11, 1921
“You may have the currency, say, gold, but you must bear in mind that there is no free market, for it is all, or nearly all, controlled by the syndicates, cartels and trusts, which are ruled by their imperialist profits. They will supply consumer goods only to workers of their own enterprises, and not for those of others, because the old capitalism—meaning the free market—is no longer there. That shows the essence of our concessions policy in the context of the present conditions of finance capital and the behemoth struggle between the trusts. The concessions policy is an alliance concluded by one side against another, and so long as we are not strong enough, we must play off their hostile rivalry, so as to hold out until the victory of the international revolution.” P. 305
On foreign currency exchange, starting with point 8 of the Concessions Agreements of the Council of the People’s Commissars:
“8. A special clause in each agreement shall regulate the question of payment to the workers employed at the concession enterprises of wages in foreign currency special
coupons, Soviet currency, etc.”
“If the wages should be paid in foreign currency, this will give rise to a number of complex problems: how is this currency to be exchanged for Soviet currency? how are we to fight speculation? etc. We have accepted the idea that we have an answer to all
these problems, and need not fear any of them. This point tells the capitalists that they are free to invent anything they like. It makes no difference to us whether you bring
in the goods and sell them for special coupons, on special terms, or only upon presentation of special certificates issued personally to workers employed at the concession.” P. 310-311
SPEECH DELIVERED AT THE THIRD ALL-RUSSIA FOOD CONFERENCE
JUNE 16, 1921
Vladimir Lenin
“The Party conference, as the supreme organ of the ruling, government Party, the leading authority of the working class, emphasised the importance of collecting the large food stock of 400 million poods. It laid emphasis on the point that the whole meaning of our food policy, permitting a large measure of unrestricted trade, boils down to building up a big food fund, as a large state reserve. Without it, neither the restoration of large-scale industry nor the restoration of the currency will be possible, and every socialist understands that unless large-scale industry—the only real basis—is restored, it is no use talking about socialist construction.” P. 444
Lenin argues that not just a gold reserve but a food reserve must back any restoration of devalued currency.
Social Credit
By Clifford Hugh Douglas
“It is significant that the peculiar brand of economics popular amongst Marxian-Socialist and Communistic propagandists is at one with apparently more orthodox economists, in suggesting the comparative unimportance of money in the economic system; that it is nothing but a reflection of the economic facts beneath it.” P. 42
“The operation would, in fact, be meaningless, from which observation we may deduce the interesting fact that presentday finance and taxation is merely an ingenious system for concentrating financial power. No proposal to redistribute the National Debt has ever received the slightest encouragement from Socialist leaders.
“Now at first sight this would appear to lend colour to the simple Labour-Socialist idea
that many men are poor, because a few are rich. Post hoc, ergo propter hoc. But once
again, the matter is not quite so simple. It is perfectly true that a few men do become very rich by this process, and very many more have hopes of riches; that is how their cooperation is secured. But it is also equally true that their collective riches, in visible form, would represent a very small sum if equally distributed amongst the general population. The main tendency of the process is to concentrate the control of credit in a potential form in great organisations, and notably in the hands of the great banks and insurance companies.” P. 48
“There is, at the moment, no party, group, or individual possessing at once the power, the knowledge, and the will, which would transmute the growing social unrest and
resentment (now chiefly marshalled under the crudities of Socialism and Communism)
into a constructive effort for the regeneration of Society.” P. 62
“It seems, therefore, an unassailable deduction from these facts that for a given
programme of production, the amount of man-hours required could be rapidly decreased, or conversely, the programme could be increased with the same man-hours of work, or any desired combination of these two could be arranged. But it is also a fact that, for a given programme, (18) increased production per man-hour means decreased
employment. It is also a fact, that never during the past few decades have we been free
from an unemployment problem, and it is also a fact that never during the past fifty years has any industrial country been able to buy its own production with the wages, salaries, and dividends available for that purpose, and in consequence, all industrial countries have been forced to find export markets for their goods.
“So that we are confronted with what seems to be a definite alternative. We can say, as we are saying up to the present time, that the wages, salaries, and dividends system, with its corollaries of the employment system, as at present understood, and the moral discipline which is interwoven with all those things, is our prime objective. Having decided that, we have decided that the industrial system with its banks, factories, and transportation systems, exists for a moral end, and does not exist for the reason which induces individuals to co-operate in it, i.e. their need for goods; and that moral end can only be achieved through the agency of the system and its prime constituent—employment. And the practical policy to be pursued is one which has been frequently pointed out from diverse sources, and which was the basis, or (19) alleged basis, of the Russian Revolution. It is to make the man-hours necessary for a given programme of production equal to the man-hours of the whole population of the world, so that every one capable of any sort of work should, by some powerful organisation, be set working for eight or any other suitable number of hours a day. To achieve this end, the use of labour-saving machinery should be discouraged, all scientific effort should be removed from industry (as was at first done in Russia), and, in particular, modern tools, processes, and the application to industry of solar energy in its various forms should be vigorously suppressed. Failing an alternative, one should dig holes and fill them up again. All this is the logical outcome of the attitude, not merely of the orthodox employer (although he may not realise it), but of the orthodox socialist, and it ought to be clearly recognised. The world has not yet passed a deliberate verdict on the matter, and it ought to have the case and the evidence; and in the meantime the atmosphere of war and economic catastrophe in which the world is enveloped, should be accepted as a desirable means towards a high moral objective.
“The other alternative, while recognising the necessity for discipline in the world, does not (20) concern itself with that necessity in considering the modem productive process. It surveys the facts, finds an inherent incompatibility between the substitution of solar”
energy for human energy, on the one hand, and the retention of a financial and industrial system based on the assumption that work is the only claim to goods, on the other hand, and takes as its objective the delivery of goods, making the objective always subordinate to human individuality. It is not concerned with abstractions, such as justice.” P. 8-9
“Pre-war Germany was always exhibited as being reactionary, feudal, and militaristic to an extent unequalled by any other great power. Post-war Russia is supposed by large masses of discontented workers, to be the antithesis of all this. But the similarity of the two is daily becoming more apparent and it is notorious that the leaders of pre-war Germany are flocking to post-war Russia in increasing numbers, in the lively hope of the fulfilment of the ideals which were frustrated by the Great War. The latest pronouncements on industrial affairs by Russian statesmen are indistinguishable from those of American, German, or British bankers (which statement is not intended as undiluted praise). (28) It is significant that the arguments voiced from all of these quarters are invariably appeals to mob psychology – “Europe must be saved,” “Workers of the World unite,” etc. The appeal is away from the conscious-reasoning individual, to the unconscious herd instinct. And the “interests” to be saved, require mobs, not individuals.” P. 11
“It has not yet, I think, been said in such a way as to dispose of the suggestion, which need not necessarily be an offensive suggestion, that the Jews are the protagonists of collectivism in all its forms, whether it is camouflaged under the name of Socialism, Fabianism, or “big business,” and that the opponents of collectivism must look to the Jews for an answer to the indictment of the theory itself. It should in any case be emphasised that it is the Jews as a group, and not as individuals, who are on trial, and that the remedy, if one is required, is to break up the group activity…
“There is no such thing as an effective national responsibility—it is a pure abstraction, under cover of which, oppression and tyranny to individuals, which would not be tolerated if inflicted by a personal ruler, escape effective criticism.” P. 11-12
“The fact that there is no physical limitation to the satisfaction of reasonable material requirements—that in fact there is no such thing in the modern world with the exception of Russia as a poor country in any sense other than that of a scarcity of tickets to operate satisfactorily as purchasing-power only serves to transfer this exhortation to be thrifty, from goods of which there is a surfeit, to money of which there is a scarcity.
“The situation is similar to that of a man provided with every form of food, and with coal, wood and matches with which to cook it, but who is accustomed to cook his food upon a paraffin stove, and is informed that there is only a pint of paraffin left, and that in consequence the most rigid economy of food must now and in the future be enforced.” P. 39
Quotes from W. H. WAKINSHAW (Accidentally fell upon his book while searching for Douglas.)
THE POSTULATES AND IMPLICATIONS OF THE SOCIAL CREDIT THEOREM OF
MAJOR C. H. DOUGLAS, M.I.M.E.
“Recently confronted with the danger of foreign currency becoming their medium of exchange, owing in part to the deliberate policy of external banking organizations, the
Russian Commissariat of Finance has introduced a bank note, in which 48 per cent, of the 40 million “ chervonetz ” are “ backed ” by bills of lading and exchange—i.e.,
ultimately goods (allowing for the inevitable modicum of artificial bills) which are, as we have previously insisted, the only final and valid basis for any sound currency. But
the Soviet Government has gone a stage further and actually printed Treasury notes without any immediate backing whatever—though clearly, functioning as Tickets, they will automatically find their own backing. With this, however, the Government has reduced prices, and seems to believe that by always keeping the market short of money as well, it can with these two measures establish a sound money system.
“This is, of course, half-way between the pre-war system of the Bank of England’s control of the money market, and the scientific technique of Major Douglas’
Price Factor. No wonder there is a well directed stream of abuse at the Soviet Government, and it is not surprising that Russia is in no urgent need to accept the demands of foreign bankers—unlike “ infelix Austria,” whose inability to “ keep on walking ” has handed her over indefinitely to the dominion and heritage of strangers. The Russians have grasped apparently that the machinery of credit is mainly a matter of psychology, and indeed in the last resort all problems in economics and politics must he
brought to that final bar of judgment.” P. 64-65
“But just as chattel slavery was inferior for productive purposes to the 19th century industrial system, so this latter, now lapsed into wage-slavery, will be found productively a frail and broken instrument compared with a society of freemen working
together on a contractual basis, instead of one founded on caste and status, the rottenness of which as a cultural theory even India is beginning to suspect and ponder.” P. 72
“The production ability has been ours for the last thirty years at least, so that there can be no alternative left but the financial or distributive mechanism as the factor of breakdown. The allusions to “ economy ” and “ hard work ” are, obviously, symptomatic of the servile virtues of stinting, meanness and quantitative toil, instead of the more masculine and imperial characteristics of enterprise and qualitative ingenuity.” P. 73
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