"But the first thing to note is that all these concerns are distributing purchasing-power to individuals in the form of wages and salaries ahead of production, which causes a rise in the price of commodities that individuals buy; or, to put it in the way described above, all money existing is diluted. Secondly, they are distributing this purchasing-power obtained out of 'credit' largely (and this is increasingly true) in respect of captial production - i.e., things which in themselves are of no use to consumers: tools, factories etc. The community as a whole, therefore, is producing and being paid for real capital as well as ultimate products and much of the real capital is permanent and survives the lifetime of its producers.
Now consider these points in connection with the proposition explained in the foregoing chapter - vis., that the current flow of wages, salaries, and dividends is less than the current flow of price-values of the articles produced - bearing in mind the fact that prices vary between a lower limit represented by cost of production and an upper limit defined by demand. It will be seen, as has been pointed out by Mr. A.R. Orage and other writers on economic subjects, that the wages and salaries (already insufficient to buy the whole of production) tend to be diluted in value until they represent the subsistence allowance of the persons concerned - in other words, total prices of ultimate commodities barely necessary for the accepted standard of life tend to equate themselves to the total effective purchasing-power of individuals, and this is true even if dividends to individuals are included and are widespread. Consequentely, and this is the all -important point we wish to make, although the unregulated system of credit-issue and price-making distributes purchasing-power both in respect of capital production (tools factories intermediate products)_- and ultimate products (necessities, services, amenities), it takes back in the prices of ultimate products only, practically the whole of this purchasing-power, leaving the community, considered as a permanent institution, in the position of having bought both the plant, and the product, but having only got delivery - i.e., control - of the product. Such a state of affairs so long as it continues makes the control of the policy of the world in the interest of the community a mere sentimental chimera- no nationalisation, guildisation or any other administrative manipulation can affect the existing control otherwise than to introduce friction into it (at the cost of everyone concerned) so long as the prices of ultimate product - the taking back of purchasing-power derived from credit - are equal to or greater than 'costs' - the dispensation of purchasing-power dervied from credit. Further, the existing control is semi-automatic; every increase of credit-expansion on these terms means a greater capital-production and a proportionately smaller use of that capital to deliver ultimate products." (C.H. Douglas, "Credit-Power and Democracy")