| Subject: | Re: [socialcredit] The Control of Production | | Date: | Monday, September 18, 2006 03:32:05 (-0600) | | From: | Wallace Klinck <wmklinck @....ca>
|
Thanks for the effort expended in providing these documents--again, I
have passed it on to the Economic Democracy List.
Wally
On 17-Sep-06, at 4:40 PM, MODERATOR wrote:
> I believe this is Douglas's second essay to be
> published in *The New Age.*
> --------------------------------------------------------
>
> May 1, 1919
>
> The Control of Production.
>
> By Major C. H. Douglas.
>
> It has frequently and rightly been emphasised in *The
> New Age* that the essence of any real progress towards
> a better condition of Society resides in the
> acquisition of control of its functions by those who
> are affected by the structure of Society; and it is
> well if somewhat vaguely recognised by the worker of
> all classes that this control is at present not
> resident in, but is external to, Society itself, and
> that in consequence men and women, instead of rising
> to an ever superior control of circumstance, remain
> the slaves of a system they did not make and have not
> so far been able to alter in its fundamentals.
>
> This system is assailed under the name of Capitalism;
> but of the millions who are convinced that by the
> destruction of Capitalism the Millennium will be
> achieved, not very many have yet awakened to the fact
> that Capitalism died an unhallowed death twenty-five
> years ago, more or less, and that the driving force of
> the system which, more than any other single cause,
> has produced the tangle of misery and unrest in which
> the world now welters, is Creditism.
>
> Credit is a real thing; it is the correct estimate of
> capacity to achieve, and the function and immense
> importance for good or evil of this real credit will
> be impressed on Guildsmen and others with cumulative
> insistence in the difficult times ahead. But for the
> moment it is desirable to consider a narrower use of
> the word; one conveying, however, a sense with which
> it is more commonly associated--financial credit.
>
> Financial credit is simply an estimate of the capacity
> to pay money--any sort of money in legal or customary
> tender; it is not, for instance, an estimate of
> capital possessed; and its use as a driving-force
> through the creation of loan-credit is directly
> consequent on this definition. The British Banking
> system has, since the Banking Act of 1844, based its
> operations on the ultimate liability to pay gold, but
> in actual fact the community, as a whole, has
> dethroned gold, and bases its acceptance of cheques
> and bills on its estimate of the bank credit of the
> individual or corporation issuing the document, and
> for practical purposes not at all on the likelihood
> that the bank will meet the document with gold. This
> bank credit simply consists of certain figures in a
> ledger combined with the willingness of the bank to
> manipulate those figures and at call to convert them
> into purchasing power. What, then, is likely to induce
> a Bank to increase the credit by the creation of
> loans, etc., of an applicant for that favour? The
> answer is contained in the definition: the capacity to
> pay money; and the credit will be extended absolutely
> and solely as the officials concerned are satisfied
> that this condition will be met. It is quite
> immaterial whether the judgment is based on existing
> “securities” or contemplated operations; the basis of
> bank credit to-day is simply and solely the capacity
> within an agreed time-limit, which may be long or
> short, to pay money.
>
> Now apply the consideration of this to such a problem
> as control of the provision of decent housing for the
> miners at rents not exceeding 10 per cent. of the
> miners’ earnings. There are a number of idealists who
> cannot be labelled otherwise than half-baked, who will
> say that it is a “sound business proposition” to house
> the miners properly at low rents. There are also a
> number of people by no means half-baked who are
> prepared to lose a little on housing to retain control
> of industry. That it is in the highest sense sound is
> unquestionable; but as to being a business-proposition
> we suggest to those well-meaning people of the first
> class whose minds are above detail, that they go to
> the banks unsupported by security, and endeavour to
> borrow money for such a project.
>
> We see, then, that it is purely a question of the
> financial effect likely to accrue from an enterprise
> which will induce the banks to back it with credit,
> and the use-value or inherent desirability of doing
> certain work is a pure by-product. But the deduction
> to be made from this is of transcendent importance--it
> is that to control industry in the interest of use
> values you must back use-values with credit. And that
> means the control of credit. And in order to control
> credit the base on which it rests must be altered to
> meet the changed aspirations of Society. The economic
> power of Labour is a potential power. By withholding
> it, Labour (using the term, in its widest sense) can
> break down civilisationtion; but it cannot build it up
> again by any agency that the mind of man has yet
> conceived which does not involve the use of credit
> capital in some form or other. The community creates
> all the credit capital there is; there is nothing
> whatever to prevent the community entering into its
> own and dwelling therein except it shall be by sheer
> demonstrated inability to seize the opportunity which
> at this very moment lies open to it; an opportunity
> which if seized and used aright would within ten years
> reduce class-war to an absurdity and politics to a
> disease.
> -
>
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