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Money, Money, Money - why isn't there enough?
WE LIVE in a world where money is God. And to worship this God we have become wage slaves. We spend around eight hours a day at work, five or six days a week, generally performing some boring, repetitive task. Why?
The answers may be found is the economic and social ideas of the Scottish engineer, Major Clifford Hugh Douglas. Although he died in 1952 his ideas are as radical, exciting and relevant today as they ever were. They challenge the orthodoxy of capitalism and socialism and offer a vision for the future. So who was Douglas and what did he advocate?
During the first decade of this century, Douglas was placed in charge of the electrical work of the London Post Office Tube Railway. This early example of automation caused Douglas to look to the future: if machine replaced man, how would man live without work? In 1917 Douglas, now a Major in the Royal Flying Corps, was seconded to Fairey Aviation to sort out a muddle in their accounts. He installed adding machines, the forerunners of computers, and made a remarkable discovery. Fairey Aviation were generating prices at a faster rate than they were distributing money is the form of wages, salaries and dividends. Could this be true of all industry? Douglas analysed the balance sheets of one hundred companies - and found it was. Here, he realised, was the cause of the phenomenon of boom and slump.
During any week, the salaries and wages paid out add up to less than the total costs of what had been produced during that week. Therefore there can never be enough money in circulation at any one time to buy everything that's for sale. Retailers close, wholesalers close, factories go bust and people are put out of work.
But if this was the case how does the system still manage to stagger on? The answer, Douglas discovered, was that the system goes on working by creating debt. Governments and individuals can -and do- borrow money against their future income. But where does this money come from? Simple. The banks just create this money, out of nothing with the stroke of a pen! Douglas interviewed bankers and politicians but his discoveries were met with hostility. After his work was published in The English Review, Douglas faced constant harassment in the form of repeated income Tax Demands.
Establishment rejection caused Douglas to put forward his own solution to the money problem. He proposed that the National Debt office be changed to the National Credit Office. That each quarter the National Credit Office calculate the discrepancy between the prices and money available to meet them, and, just as the banks do, create the credit to bridge the gap. This credit would be distributed as a NATIONAL DIVIDEND (also called 'The Wages of the Machine') to all families and as a NATIONAL DISCOUNT on all prices in the shops (also called 'The Compensated Price', or the 'Just Price'). The National Dividend would be enough for people to be able to live on and buy goods with. The National Discount would reduce costs.
With the National Dividend and National Discount, Douglas also questioned the sense in, and the necessity for, engaging in employment primarily to acquire a money income to meet basic needs. Above all, he believed that the adoption of his ideas would gradually replace the tyranny of the factory and the dole, and provide a decent and secure life for all.
One doesn't need to be a expert to know that there is obviously something drastically wrong with the present financial system. Many folk know this instinctively - why do we have poverty in the midst of plenty? Look at the way that many of our people go hungry whilst our farmers are paid not to grow crops and not to raise cattle. Douglasís ideas are a radical challenge to the existing orthodoxy. The old parties are just arguing about ways to get a broken economic Engine to work properly. Douglas said that the whole engine is defective, it will never go properly - so chuck it away and get a new engine. That new engine is called Social Credit!
A THIRD WAY FOR ULSTER
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