THE MONOPOLY OF CREDIT
By C.H. Douglas  

Chapter IX

DIVIDENDS FOR ALL
WHILE the financial control of industry when inaugurated seems definitely undesirable, certain reservations will at once occur to the student. Industry has run riot over the countryside. A population which has been educated in the fixed idea that the chief, if not the only, objective of life is well named "business", whose politicians and preachers exhort their audiences to fresh efforts for the capture of markets and the provision of still more business, cannot be blamed if, as opportunity occurs, it still further sacrifices the amenities of the countryside to the building of more blast-furnaces and chemical works. Since the control of credit is the most perfect mechanism for the control of industrial activity, its use in the hands of a representative organisation would appear to be the best possible way of reducing the chaos which exists, to something like order 

It would appear, therefore, that even this desirable aspect of financial control is rendered ineffective under its present operation. Before an intelligent system of regional planning can be inaugurated with any hope of success, some agreement is necessary as to whether unemployment, in its alternative description of leisure, is a misfortune or whether it is a release. If it is a release, then obviously it must not be accompanied by economic, or rather financial, penalisation. If it is a misfortune, then clearly every effort should be directed to restraining the abilities of those engineers and organisers who are prepared to make not two, but two hundred blades of grass grow where one grew before.

An appreciation of this position is perhaps the shortest way to arrive at a conception of the modifications which are required. If we assume that the constant efforts to reduce the amount of labour per unit of production are justified, and we recognise the unquestionable fact that the genuine consumptive capacity of the individual is limited, we must recognise that the world, whether consciously or not, is working towards the Leisure State. The production system under this conception would be required to produce those goods and services which the consumer desires of it with a minimum and probably decreasing amount of human labour. Production, and still more the activities which are commonly referred to as "business," would of necessity cease to be the major interest of life and would, as has happened to so many biological activities, be relegated to a position of minor importance, to be replaced, no doubt, by some form of activity of which we are not yet fully cognisant. 

In a physical sense then we should be living in a world in which economic processes were carried out by two agencies, one, as heretofore, the agency of individual effort and from an economic point of view of decreasing importance, and the other, as the result of the plant, organisation, and knowledge which are the cumulative result of the effort not only of the present generation, but of the pioneers and inventors of the past. This second agency can, of course, be collectively described as real (as distinct from financial) capital. Now it is quite easy to make out a perfectly simple ethical justification for the proposition that the share of the product due to the individual under such a state of affairs would be (1) a small and decreasing share due to his individual efforts, and (2) a large and increasing amount due to his rights as a shareholder or an inheritor, or if it may be preferred, a tenant for life of the communal capital. But in fact such an argument is far less satisfactory than the equally valid argument that the communal capital is useless to exactly the extent that any proportion of the public is prevented from drawing upon it, which is, of course, the general explanation of the vast amount of idle real wealth at the present day.

39

Up to this point the facts must be clear enough to anyone who is content to consider the matter dispassionately. Proceeding from this stage, and remembering that a satisfactory financial system is simply a reflection in figures of a state of affairs alleged to exist in fact, or is, in other words, simply an accounting system, it is not difficult to understand that wages and salaries in relation to dividends ought to become increasingly unimportant. Production is far more dependent upon real capital than it is upon labour, although without labour there is no production. More and more the position of labour, using, of course, this word in its widest possible sense, tends to become the catalyst in an operation impossible without its presence, but carried on with a decreasing direct contribution from labour itself.

Let us at this point for the sake of clarity identify the community with the nation and in doing so be careful not to confuse administration with ownership. It ought not to be difficult to see that a situation which may truly be described as revolutionary is disclosed. In place of the relation of the individual to the nation being that of a taxpayer it is easily seen to be that of a shareholder. Instead of paying for the doubtful privilege of being entitled to a particular brand of passport, its possession entitles him to draw a dividend, certain, and probably increasing, from the past and present efforts of the community of which he is a member. The National Debt, which he did not create, becomes a national credit which is a reflection of the national capital which he did create. His budget is not required to balance because his wealth is always increasing. He does not require to fight for foreign markets, since obtaining foreign markets merely means a longer working day. Having more leisure he is less likely to suffer from either individual or national nerve-strain, and having more time to meet his neighbours can reasonably be expected to understand them more fully. Not being dependent upon a wage or salary for subsistence, he is under no necessity to suppress his individuality, with the result that his capacities are likely to take new forms of which we have so far little conception.  

40


CHAPTER X

Conclusion
SINCE at the time at which these lines are written the world is universally, if not uniformly, involved in a major crisis, it is perhaps useful to consider not alone what ought to be done (since it is hoped that at any rate in outline the nature of the disease will have become evident from the preceding pages, while the principles of the remedy may be gathered from the appendices and from previous works), but what in fact can be done. 

Perhaps the first point on which to be clear is that this immense, nay, almost omnipotent, power which is wielded by the financial organisation, and which therefore must in the nature of things be responsible for the situation in the world to-day, has not until recently been recognised in its true nature. In fact, every artifice, either of the press or of politics, has been used to identify the conduct of nations with their titular governments, while at the same time vilifying them for the progressively disastrous results. t is, in my opinion, not too much to say that these governments are now superseded by financial institutions, and that these financial institutions, so far as can be humanly judged, are in an impregnable position.

Now if we have an undertaking of which the directorate cannot be removed, however at variance with the desires of the proprietors may be its conduct, we can see that the outcome must be one of two things. Either the directors will, by superior adjustments of policy, produce such results as will in time remove cause for complaint, or alternatively, their policy being bad, the undertaking will go to shipwreck. In these circumstances there is probably only one useful course of action, and that is, so far as possible, to make it clear to everyone concerned that in existing circumstances the directors cannot be removed, and that they alone are responsible for the outcome of their policy.

That, I think is the course which at the present time should be consistently pursued. It se ems difficult to doubt that the efforts of those in control of financial policy are primarily, if not entirely, concerned with making the world safe for bankers, rather than making the world safe. By one of those curious ironies which seem to be present in great crises, it happens, as one might say, by a side-wind, that the world cannot be made safe without removing the banker, painlessly or otherwise, from the commanding position which he now occupies. The alternative is in fact clear, and nothing effective can be done to protect civilisation from its major risks which is not an attack upon the power of finance. It would seem, therefore, that the fixation of responsibility largely by means of an explanation of financial processes, and of the probable results of financial policy, is the first effective step which can be taken, not only to prepare for the still further chaos which seems likely to ensue, but to strengthen the hands of those agencies which may be effective in the restoration of popular control. 

But this fixation of responsibility can in no sense be considered complete if it remains at this point. There probably never was within historic times so important a period in the world's history as that through which we are passing at the present time. If we are to emerge from this period into the millennium which is easily possible, although by no means certain, the reorganisation necessary must be based on a philosophy which, whatever other elements it may contain, will certainly not enthrone the productive and industrial systems in the preponderatingly important position which they have occupied for the past hundred years.
41

A perusal of contemporary journalism, nay, an examination of the formal constitutions of such States as those of Italy and the Soviet Republics of Russia, would lead one to suppose that the sole object of man's existence is material production. The matter has been well put in the doggerel, "We go to work to earn the cash to buy the food to get the strength to go to work to earn the cash . ."; and so ad infinitum. For this reason it is necessary to examine any proposal for the rectification of the existing situation with at least as much care as the policy now operative

Another aspect of this same mentality is exemplified by the abrogation to themselves, by labour movements in particular, of the freehold rights of all civic virtue. There is probably no subject in which there is more muddled thinking than in respect to the right of the unfortunate in this world on the one hand to compassion, and on the other hand to consultation. There cannot be too much concern for the unfortunate condition of large numbers of human beings in contemporary society, but to suppose that this position gives them a special claim to exercise a voice in the direction of affairs is to put a premium on inexperience irrespective of whether the conditions which have brought about that inexperience are personal or otherwise. The modern State is a completely immoral organisation. Its taxation differs in no fundamental quality from that levied by a highwayman of the Middle Ages, and the fact that a small proportion of the taxes which are exacted is used for the alleviation of the more pressing necessities of the poor, bears much the same relation to the question as the liberality, to his followers, of a mountain bandit. Political democracy without economic democracy is dynamite. The need is to abolish poverty, not to represent it.

It seems indisputable that no modern economic system can be based on any theory of rewards and punishments. Either the economic system will provide, as it undoubtedly can, an ample living for everyone, in which case arbitrary restriction, even if practicable, would appear to be quite senseless, or, on the other hand, some method at present quite unknown must be developed for dealing with a situation in which there is, for instance, one post in the economic system to be filled, and ten equally satisfactory applicants for it. Failure to deal with this latter situation makes a complete reconstruction of human nature indispensable, and the reconstruction of human nature within a reasonable period does not appear to be a hopeful undertaking.

If civilisation is not to disappear altogether, there will within a comparatively short period of time arise a situation in which bankers as at present understood will be replaced. It seems important to recognise that when this situation does arise it will be just as easy to inaugurate a financial system which will meet all the necessities of a modern civilisation, as to introduce piecemeal reforms. Here again there is much evidence of inability to think clearly on the matter. Numbers of well-disposed people recognise the implacable hostility with which effective proposals are met, and are tempted to say in effect "we cannot do the right thing, let us at any rate do something". Although it seems difficult to obtain general und erstanding of it, fundamentally a financial system is a matter of pure arithmetic, and the results which will be obtained depend entirely upon the arithmetical factors which are employed and only to a very temporary extent on the particular brand of black magic which is superimposed. Whatever may be the case in other matters, compromise in arithmetic seems singularly out of place, and it is much better that the present defective system should be allowed to discredit its upholders, and so render genuine reconstruction possible, than that an alternative, of which the effects are not sufficiently beneficia